What is the impact of technology on the future? In other words, what will the future look like?
It is impossible to forecast how things will evolve specifically. However, we do know, based upon the characteristics of technology along with technological trends, where things are heading.
Understanding this can be of great help. There is a lot of fear and uncertainty out there about this and for good reason. Never have we seem things advancing at such a pace. Many allude to the power of what is being created. To me, the more important variable is the speed.
This is what is going to disrupt society the most. Humanity is simply ill-suited for what is coming. Our institutions, quite frankly, are too slow and non-flexible. This is going to cause a lot of chaos.
In fact, a case could be made that we are already starting to experience it.
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The Impact of Technology on the Future
Personally, I am one they phrase as a techno-optimist.
I know the media is full of it. Very little of what they say is anything more than agenda driven. This holds true for Hollywood. Have you noticed how they conditioned people about technology?
What is amazing is that many people will claim the media is not trustworthy will also tell you how dangerous technology is and how The Terminator is just around the corner. After all, Skynet is about to take over.
Of course, I simply ask who is Skynet and get crickets? Is it Meta? Google? OpenAi? Sam Altman?
If we move past the nonsense, we see there are clear signs of what technology brings. This is a generalization, naturally, and individual technologies (and companies) can experience different outcomes.
There are two main facets to focus upon.
Abundance
Technology creates abundance. This is especially true for the digital world.
Many today do not understand this concept since they are too young. It is likely that one needs to remember how things were in the 1980s to understand this concept.
As compared to that time, we are in abundance in many areas. All of this is due to digitization.
If we look at music, video, communication, and information, all of that moved past the scarcity realm.
For example, would you ever consider spending $5,000 on recorded music? That seems asinine today. In fact, how would you even go about that? I guess you could download 5,000 songs from iTunes or something.
As absurd as that sounds, I had a roommate in college who did just that. He had a music collection of 400-500 compact discs (remember those?). The storage cases literally took up large part of a wall.
We see the same thing with communication.
Due to the Internet, we can communicate with over 5 billion people around the world. There are untold ways to message people. No longer are we relegated to just writing letters or making a telephone call. Ironic we still tend to call it a phone when that is the lead used feature on a smartphone.
Our early results with generative AI is showing the same trend. This is moving us towards a time where information, images, music, and eventually video will be even more abundant. The pace of output is increasing significantly due to AI.
Robotics promises to bring this same concept to the physical world. That is trailing AI by a number of years so the impact is not visible to most. Give this a few years and I think the path will be evident.
Deflation
This is something that excites people since many operate under the concept of "inflation bad, deflation good". Sadly, this is not the case and people are going to learn this the hard way.
Technology is deflationary.
Look at the couple examples already provided. With music, a subscription to Spotify or Pandora can give one access to 40 million songs, all for $10 or so per month. Even if you don't want to pay, you can have the same access with some advertising.
There was a time where calling outside your local area incurred a per minute charge. Phone companies made a fortune on long distance charges. How many still pay this? We can communicate with people globally for virtually nothing. If there is a charge, it is pennies on the dollar compared to what it use to be.
This does occur in the physical world also. Have you see what $400 in a developed country gets you in terms of a television compared to 30 years ago?
Seriously, this is what they were like.
When deflation hits, prices come down. Many think that a positive because they only look at things such as groceries. However, there is another side to this: companies also see their revenues declining.
This is what gets overlooked.
If we look at the income statement, there are two things: income (revenue) and expenses.
When revenues decline, companies are forced to look at expenses. That means reducing their costs. The goal here is to reduce expenses at a pace faster than the revenue decline.
Since labor is often the largest expense for a company, what do you think happens? People lose their job.
Does it really matter how much the price of eggs drop when your income went to zero (or near zero)?
Think of all those people who worked at video cassette rental places. What happened? Technology in the form of streaming (Netflix mostly) disrupted the business model to the point where everyone lost their job.
Deflation in action.
We now can watch 168 hours per week of video on Netflix for $15 per month. This is a lot less than the $3.50 per video that Blockbuster and others charged (for a one day rental). Prices came down but the impact was clear.
This is why many jobs are cooked. As mentioned earlier, the pace is what we need to focus upon.
I wrote a number of articles of how Hollywood is done. Again, we are seeing the early results already starting to drift in. There is a potential strike at the US ports over the threat of automation replacing those jobs.
Modern day Luddites.
Unfortunately for those people, they are going to suffer the safe fact as those 150 years ago.
The Age of Abundance
We are entering the age of abundance for a couple different reasons.
The development of robots (machinery) is developing to the point where it is a becoming a legitimate bridge between the digital and physical worlds.
What we have is a double impact upon the two main drivers of economic productivity. Historically, those were basically technology and population that was responsible for growth (some will include debt into the equation).
Robots advance both.
To create a worker, it requires an estimate $300K in the developed countries and a couple decades. When the future worker is created, it is nowhere capable of contributing. In fact, he or she cannot even stand up.
It takes time for a baby to grow into a contributing member of the workforce. Obviously, with the impending collapse in population in many countries, this takes on added meaning.
Robots, on the other hand, are much quicker. When one is "born", it simply needs to be delivered, receive a software upgrade, and it is good to go. The time form "birth" to economic productivity is only a few weeks (or months at most).
There will come a time when we see more than 1 billion humanoid robots produced in a year. This is somewhere around an 11% growth in the population. Consider what that does for economic productivity.
Hence why we are entering the age of abundance. For now we are seeing the radical advancement in the digital realm. Software can move much quicker.
The reality is that both are going to merge, creating a convergence explosion. This one will far outpace the smartphone, which was radically altered society.
A 10 Year Window
I will issue a forecast and, bear in mind, this is at most.
We have a 10 year window to adjust. The impact of technology over the next decade is going to far surpass anything people experienced before.
There are many guesses as to what we see with regards to the past. Some assert that we will pack in the last 40 years of development in the next 10. For others, who are a bit more optimistic, they believe it will equate to 100 years.
Whatever it is, consider if we see the same jump in the next decade as was experienced between the mid 1980s and today. That will have serious implications on all aspects of society.
The takeaway from this is we are going to see things much different by the middle of the next decade.
It is best to prepare ourselves now. This starts with the grasping of what is happening, that things are going to change to a much greater degree than most are stating.
As said, the specifics are hard to forecast. Yet we do know the overall trend.
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