Next Room is kind of like a mash up between a stethoscope, MP3 player and an old fashioned drinking glass. According to the product page, you can hear what is being said through wooden walls, doors, windows—even steel plates.
It features an internal sound amplifier, a 3.5mm jack for headphones and a USB port for recharging. Nice, but if you really want to take this whole scumbaggy espionage thing to another level, you go with the SIM card spy ear. [Chinagrabber via 7Gadgets via OhGizmo]
I finally started watching Californication recently, but my big annoyance since then is that my—ahem—mostly-legally downloaded episodes take ages to transfer wirelessly from laptop to media center PC. Thankfully Lifehacker's got a DIY wiring solution for my troubles.
The instructions are actually pretty thorough and explain everything you need to know about running CAT 5e or CAT 6 cables through your home, walls, and attic without making a horrid mess, but please don't blame me if you somehow manage to destroy something anyway. [Instructables via Lifehacker]
So, I'm doing the Mindflex game review, and I start thinking about the evolution of classic board games. Personally, I like the fact that many of them got a 21st century makeover. These 10 games may have purists thinking otherwise.
For the most part, do you consider these digital upgrades as good or bad ideas?
18 programmable buttons. E-I-G-H-T-E-E-N! Forget the 512k of flash memory, analog Xbox 360-style joystick, basic scroll wheel and whatever-else-is-in-there. 18 buttons! Yes, I'm a button lover. Yes, I just had an orgasm. And yes, I will waste $75 on this.
Sure, it's not that attractive looking and it's probably awkward as all hell to use, but the prospect of programming all those buttons has me giddy. While the guy who designed the mouse thinks it'd be great for World of Warcraft or OpenOffice tasks, I know I won't be wasting a single button for either of those things. Anyone got better suggestions? [Open Office Mouse—Thanks, Joel!]
In an email exchange earlier today, Microsoft indirectly admitted that Xbox 360s are receiving an updated tamper-resistant warranty sticker. From the company:
"We continually work on the security of our devices, including updates to the tamper seal. Beyond that, we have no further comment."
They also added that Steve Ballmer has always been a huge fan of stickers, having one of the most expansive collections in the world.
Hey Google! I adore your celebration of Sesame Street's 40th anniversary and such things, but what are you doing sticking an ad on your homepage? An ad for Verizon's Droid of all things.
It's a simple text link that leads to Google's mobile partners page which then has a link to the actual Verizon Wireless site. But despite that extra click, it's still incredibly rare to see any sort of ad on the otherwise clean homepage. Especially when it kinda conflicts with Google's attempts to make the things even more minimalist lately. [TechCrunch]
Here at The Futurist, we maintain a track record of predicting bubbles, busts, and recessions long before they happen. For example, the housing bubble was identified in April 2006, back when a person could be socially excommunicated for claiming that houses may not rise in value forever. After that, I have identified when the current recession started, months before most economists, and have even predicted when the present recession will end, and at what level job losses would end at. This track record will now lead me to set my sights on the next two troubles on the horizon, which will be the causes of the next two potential recessions.
1) 2011 : The tax cuts enacted by President Bush are set to expire at the end of 2010, returning tax brackets to what they were in 2000. Most middle class brackets will rise by 3%, and the top bracket will rise 4.6% from 35% to 39.6%. This is effectively a tax increase that will be upon us in 14 months. At the same time, the Fed Funds rate is at a record low near 0%, and has been for several months. This low interest rate has ended the current recession, but virtually guarantees future inflation. As the Federal Reserve is forced to raise interest rates, liquidity contracts again, the housing prices continue on the correction that was not allowed to complete itself in 2009. A mere rise in the rate back up to 3% could push housing prices down another leg, battering household wealth yet again, and driving yet more people into negative net worth. The housing correction is not fully complete until we have sustained a Fed Funds rate over 3% for at least a year. The timing of this could combine with the tax increase, which would create a joint burden too heavy for the economy to bear, causing a new recession in 2011.
This situation could be avoided easily, by reducing the budget deficit through the quaint notion of spending cuts instead of tax increases that stifle incentives and encumber small businesses. However, barring a seismic shift in the 2010 congressional elections that dispose of many Democrats and replace them with fiscally conservative Republicans (themselves an endangered group within the Republican Party), I do not see the government taking prudent preventive action.
2) ~2017 : For all the uninformed talk about a 'weak dollar', the damage of this will affect nations that export to the US more than the US itself. However, when the PPP per capita GDP of China begins to exceed the world average (by about 2017), then Chinese currency will have to rise to achieve convergence with nominal GDP, effectively adding several trillion dollars to nominal World GDP. This will lead to massive tectonic shifts in the global economy, none of which are destructive, but will result in confusion, for which the immediate reaction will be a US and EU recession (even amidst a rise in World GDP) until all of the following effects are sorted out :
a) The US will see a bout of inflation as prices of Chinese imports rise. At the same time, US exports will surge.
b) Oil prices will spike above $120 as Chinese purchasing power of oil rises, effectively creating greater demand. This will cause short-term pain, followed by longer-term good as described here. Part of the good from an oil spike will be the collapse of many tyrannical petro-regimes, due to burning the candle at both ends, as detailed in the link.
c) Many of the developing countries that neighbor China (which are populated by an additional 2 billion people) will experience the gravitational pull of China's now huge economy, and see a forced currency appreciation long before they are ready. This will cause an unexpected set of changes in India, Pakistan, Bangladesh, VietNam, the Philipines, and Indonesia (these 6 countries containing 2 billion people) as a massive adjustment process will have to occur in a very short time, toppling many industries and creating new ones within these countries.
d) After everything is sorted out, the US and EU will be significantly smaller percentages of World GDP, but the US would see higher GDP growth rates due to a near-elimination of the trade-deficit. Asia, as a region, would have a much larger economy than the EU or North America.
So these are the two possible recessions that the US faces, the first in 2011 and the second in the latter half of the next decade. Prudent fiscal management could sidestep the first, while the second is an inevitable byproduct of the adjustments borne of poverty reduction.
In any event, investment opportunities, and, more importantly, bullet-dodging opportunities abound. In the immediate term, however, if you are considering buying a home in an expensive US area such as New York or California, do not buy one.
Related :
The Housing Bubble - 20-Year Gains May Never be Repeated
A Future Timeline for Economics
Some of you may recall that over three and a half years ago, on February 4, 2006, I predicted that by 2013, at least 900 million people in emerging nations, 80% of whom had no Internet connection in 2006, would have access to a wireless broadband connection through their cellphones. That seemed like a bold prediction at the time.
It is often said that no other invention has done more for so many people so quickly than the mobile phone, given the large number of people who did not have even a landline phone prior to getting a mobile phone. However, the inital deployment of rudimentary mobile phones was just the beginning. As 3G broadband at speeds greater than 1 mbps spread to a billion people with no prior Internet access, the entire nature of their existence is transformed. As per this second chart from the Economist report, the GDP boost from broadband Internet penetration is far higher than the already-impressive boost we have seen from simple mobile access, and we can thus expect another, stronger wave of human advancement as mobile broadband diffuses. 
We can thus proceed to the next prediction, which is that by 2020, 4 billion people will have 4G wireless broadband access on their handheld mobile phone, at speeds exceeding 100 Mbps. In other words, a landline speed that even wealthy Americans could not have in 2005 will be available wirelessly to billions of the very poorest people just 15 years later, in 2020. Imagine that.
The Singularity. The event when the rate of technological change becomes human-surpassing, just as the advent of human civilization a few millenia ago surpassed the comprehension of non-human creatures. So when will this event happen?
There is a great deal of speculation on the 'what' of the Singularity, whether it will create a utopia for humans, cause the extinction of humans, or some outcome in between. Versions of optimism (Star Trek) and pessimism (The Matrix, Terminator) all become fashionable at some point. No one can predict this reliably, because the very definition of the singularity itself precludes such prediction. Given the accelerating nature of technological change, it is just as hard to predict the world of 2050 from 2009, as it would have been to predict 2009 from, say, 1200 AD. So our topic today is not going to be about the 'what', but rather the 'when' of the Singularity.
Let us take a few independent methods to arrive at estimations on the timing of the Singularity.
1) Ray Kurzweil has constructed this logarithmic chart that combines 15 unrelated lists of key historic events since the Big Bang 15 billion years ago. The exact selection of events is less important than the undeniable fact that the intervals between such independently selected events are shrinking exponentially. This, of course, means that the next several major events will occur within single human lifetimes.
Kurzweil wrote with great confidence, in 2005, that the Singularity would arrive in 2045. One thing I find about Kurzweil is that he usually predicts the nature of an event very accurately, but overestimates the rate of progress by 50%. Part of this is because he insists that computer power per dollar doubles every year, when it actually doubles every 18 months, which results in every other date he predicts to be distorted as a downstream byproduct of this figure. Another part of this is that Kurzweil, born in 1948, is taking extreme measures to extend his lifespan, and quite possibly may have an expectation of living until 100 but not necessarily beyond that. A Singularity in 2045 would be before his century mark, but herein lies a lesson for us all. Those who have a positive expectation of what the Singularity will bring tend to have a subconscious bias towards estimating it to happen within their expected lifetimes. We have to be watchful enough to not let this bias influence us. So when Kurzweil says that the Singularity will be 40 years from 2005, we can apply the discount to estimate that it will be 60 years from 2005, or in 2065.
2) John Smart is a brilliant futurist with a distinctly different view on accelerating change from Ray Kurzweil, but he has produced very little visible new content in the last 5 years. In 2003, he predicted the Singularity for 2060, +/- 20 years. Others like Hans Moravec and Vernor Vinge also have declared predictions at points in the mid/late 21st century.
3) Ever since the start of the fictional Star Trek franchise in 1966, they have made a number of predictions about the decades since, with impressive accuracy. In Star Trek canon, humanity experiences a major acceleration of progress starting from 2063, upon first contact with an extraterrestrial civilization. While my views on first contact are somewhat different from the Star Trek prediction, it is interesting to note that their version of a 'Singularity' happened to occur in 2063 (as per the 1996 film Star Trek : First Contact).
4) Now for my own methodology. We shall first take a look at novel from 1863 by Jules Verne, titled "Paris in the 20th Century". Set about a century in the future from Verne's perspective, the novel predicts innovations such as air conditioning, automobiles, helicopters, fax machines, and skyscrapers in detail. Such accuracy makes Jules Verne the greatest futurist of the 19th century, but notice how his predictions involve innovations that occured within 120 years of writing. Verne did not predict exponential growth in computation, genomics, artificial intelligence, cellular phones, and other innovations that emerged more than 120 years after 1863. Thus, Jules Verne was up against a 'prediction wall' of 120 years, which was much longer than a human lifespan in the 19th century.
But now, the wall is closer. In the 3.5 years since the inception of The Futurist, I have consistently noticed a 'prediction wall' on all long-term forecasts, that makes it very difficult to make specific predictions beyond 2040 or so. In contrast, it was not very hard to predict the state of technology in 1930 from the year 1900, just 30 years prior. Despite all the inventions between 1900 and 1930, the diffusion rate was very slow, and it took well over 30 years for many innovations to affect the majority of the population. The diffusion rate of innovation is much faster today, and the pervasive Impact of Computing is impossible to ignore. This 'event horizon' that we now see does not mean the Singularity will be as soon as 2040, as the final couple of decades before the Singularity may still be too fast to make predictions about until we get much closer. But the compression of such a wall/horizon from 120 years in Jules Verne's time to 30 years today gives us some idea of the second derivative in the rate of change, and many other top futurists have observed the same approaching phenomenon. By 2030, the prediction wall may thus be only 15 years away. By the time of the Singularity, the wall would be almost immediately ahead from a human perspective.
So we can return to the Impact of Computing as a driver of the 21st century economy. In the article, I have written about how about $700 Billion per year as of 2008, which is 1.5% of World GDP, comprises of products that improve at an average of 59% a year per dollar spent. Moore's Law is a subset of this, but this cost deflation applies to storage, software, biotechnology, and a few other industries as well.
If products tied to the Impact of Computing are 1.5% of the global economy today, what happens when they are 3%? 5%? Perhaps we would reach a Singularity when such products are 50% of the global economy, because from that point forward, the other 50% would very quickly diminish into a tiny percentage of the economy, particularly if that 50% was occupied by human-surpassing artificial intelligence.
We see these parameters deliver a series of years, with the median values arriving at around the same dates as aforementioned estimates. Taking all of these points in combination, we can predict the timing of the Singularity. I hereby predict that the Technological Singularity will occur in :
2060-65 ± 10 years
So the earliest that it can occur is 2050 (hence the URL of this site), and the latest is 2075, with the highest probability of occurance in 2060-65. There is virtually no statistical probability that it can occur outside of the 2050-75 range (sorry, Ray).
So now we know the 'when' of the Singularity. We just don't know the 'what', nor can we with any certainty.
Related :
Pre-Singularity Abundance Milestones
At that time, Cisco and Hewlett Packard both launched full-room systems that cost over $300,000 per room. Since then, there has not been any price drop from either company, which is unheard of for a system with components subject to Moore's Law rates of price declines. This indicates that market demand has been high enough for both Cisco and HP to sustain pricing power and improve margins. Smaller companies like LifeSIze, Polycom, and Teleris have lower-end solutions for as little as $10,000, that have also been selling briskly, but have not yet dragged down the Cisco/HP price tier.
In a trend that could transform the way companies do business, Cisco Systems has slashed its annual travel budget by two-thirds — from $750 million to $240 million — by using similar conferencing technology to replace air travel and hotel bills for its vast workforce.
Likewise, Hewlett-Packard says it sliced 30 percent of its travel expenses from 2007 to 2008 — and expects even better results for 2009 — in large part because of its video conference technology.
If Cisco can chop its travel expenses by two-thirds, and save $500 million per year (which increases their annual profit by a not-insignificant 6-10%), then every other large corporation can save a similar magnitude of money. For corporations with very narrow operating margins, the savings could have a dramatic impact on operating earnings, and therefore stock price. The Fortune 500 alone (excluding airline and hotel companies) could collectively save $100 billion per year, in a wave set to begin immediately if either Cisco or HP drops the price of their solution, which may happen in a matter of months. We will soon see that for every $20 that corporations used to spend on air travel and hotels, they will instead be spending only $1 on videoconferencing expenses. This is gigantic gain in enterprise productivity.
Needless to say, high-margin airline revenue from flights between major business centers (such as San Francisco-Taipei or New York-London) will be slashed, and airlines will have to consolidate to fewer flights, making suitability for business travel even less flexible and losing even more passengers. Hotels will have to consolidate, and taxis and restaurants in business hubs will suffer as well. But these are merely the most obvious of disruptions. What is even more interesting are the less obvious ripple effects that only manifest a few years later, which are :
1) Employee Time and Hassle : Anyone who has had to travel to another continent for a Mon-Fri workweek trip knows that the process of taking a taxi to the airport, waiting 2 hours at the airport, the flight itself, and the ride to the final destination consumes most of the weekends on either side of the trip. Most senior executives log over 200,000 miles of flight per year. This is a huge drag on personal time and quality of life. Travel on weekdays consume productive time that the employer could benefit from, which for senior executives, could be worth thousands of dollars per hour. Furthermore, in an era of superviruses, we have already seen SARS, bird flu, and swine flu as global pandemic threats within the last few years. A reduction of business travel will slow down the rate at which such viruses can spread across the globe and make quarantines less inconvenient for business (although tourist travel and remaining business travel are still carriers of this).
2) Real Estate Prices in Expensive Areas : Home prices in Manhattan and Silicon Valley are presently 4X or more higher than a home of the same square footage 80 miles away. By 2015, the single-screen solution that Cisco sells for $80,000 today may cost as little as $2000, and those from LifeSize and others may be even cheaper, so hosting meetings with colleagues from a home office might be as easy as running a conference call. A good portion of employees who have small children may find it possible to do their jobs in a manner than requires them to go to their corporate office only once or twice a week. If even 20% of employees choose to flee the high-cost housing near their offices, the real estate prices in Manhattan and Silicon Valley will deflate significantly. While this is bad news for owners of real-estate in such areas, it is excellent news for new entrants, who will see an increase in their purchasing power. Best of all, working families may be able to afford to have children that they presently cannot finance.
3) Passenger Aviation Technological Leap : Airlines and aircraft manufacturers have little recourse but to respond to these disruptions with innovations of their own, of which the only compelling possibility is to have each journey take far less time. It is apparent that there has been little improvement in the speed of passenger aircraft in the last 40 years. J. Storrs Hall at the Foresight Institute has an article up with a chart that shows the improvements and total flattening of the speed of passenger airline travel. The cost of staying below Mach 1 vs. being above it are very different, as much as 3X, which accounts for the sudden halt in speed gains just below the speed of sound after the early 1960s. However, the technologies of supersonic aircraft (which exist, of course, in military planes) are dropping in price, and it is possible that suborbital passenger flight could be available for the cost of a first-class ticket by 2025. The Ansari X-prize contest and Space Ship Two have already demonstrated early incarnations of what could scale up to larger planes. This will not reverse the video-conferencing trend, of course, but it will make the airlines more competitive for those interactions that have to be in person.
So we are about to see a cascade of disruptions pulsate through the global economy. While in 2009, you may have no choice but to take a 14-hour flight (each way) to Asia, in 2025, the similar situation may present you with a choice between handling the meeting with the videoconferencing system in your home office vs. taking a 2-hour suborbital flight to Asia.
This, my friends, is progress.
On April 1, 2006, I wrote a detailed article on the revolutionary changes that were to occur in the concept of home entertainment by 2012 (see Part I and Part II of the article). Now, in 2009, half of the time within the six-year span between the original article and the prediction has elapsed. Of course, given the exponential nature of progress, much more happens within the second half of any prediction horizon relative to the first half.
The prediction issued in 2006 was:
Video Gaming (which will no longer be called this) will become a form of entertainment so widely and deeply partaken in that it will reduce the time spent on watching network television to half of what it is (in 2006), by 2012.
The basis of the prediction was detailed in various points from the original article, which in combination would lead to the outcome of the prediction. The progress as of 2009 around these points is as follows :
1) Video game graphics continue to improve : Note the progress of graphics at 10-year intervals starting from 1976. Projecting the same trend, 2012 will feature many games with graphics that rival that of CGI films, which itself can be charted by comparing Pixar's 'Toy Story' from 1995 to 'Up' from 2009. See this demonstration from the 2009 game 'Heavy Rain', which arguably exceeds the graphical quality of many CGI films from the 1990s.
The number of polygons per square inch on the screen is a technology that is closely tied to The Impact of Computing, and can only rise steadily. The 'uncanny valley' is a hurdle that designers and animators will take a couple of years to overcome, but overcoming this barrier is inevitable as well.
2) Flat-screen HDTVs reach commodity prices : This has already happened, and prices will continue to drop so that by 2012, 50-inch sets with high resolution will be under $1000. A thin television is important, as it clears the room to allow more space for the movement of the player. A large size and high resolution are equally important, in order to create an immersive visual experience.
We are rapidly trending towards LED and Organic LED (OLED) technologies that will enable TVs to be less than one centimeter thick, with ultra-high resolution.
3) Speech and motion recognition as control technologies : When the original article was written on April 1, 2006, the Nintendo Wii was not yet available in the market. But as of June 2009, 50 million units of the Wii have sold, and many of these customers did not own any game console prior to the Wii.
The traditional handheld controllers are very limited in this regard, despite being used by hundreds of millions of users for three decades. If the interaction that a user can have with a game is more natural, the game becomes more immersive to the human senses. See this demonstration from Microsoft for their 'Project Natal' interface technology, due for release in 2010.
Furthermore, haptic technologies have made great strides, as seen in the demonstration videos over here. Needless to say, the possibilities are vast.
4) More people are migrating away from television, and towards games : Television viewership is plummeting, particularly among the under-50 audience, as projected in the original 2006 article. Fewer and fewer television programs of any quality are being produced, as creative talent continues to leak out of television network studios. At the same time, World of Warcraft has 11 million subscribers, and as previously mentioned, the Wii has 50 million units in circulation.
There are only so many hours of leisure available in a day, and Internet surfing, movies, and video games are all more compelling than the ever-declining quality of television offerings. Children have already moved away from television, and the trend will creep up the age scale.
5) Some people can earn money through games : There are an increasing number of ways where avid players can earn real money from activities within a Game. From trading of items to selling of characters, this market is estimated at over $1 billion in 2008, and is growing. Highly skilled players already earn thousands of dollars per year this way, and with more participants joining through more advanced VR experiences described above, this will attract a group of people who are able to earn a full-time living through these VR worlds. This will become a viable form of entrepreneurship, just like eBay and Google Ads support entrepreneurial ecosystems today.
Taking all 5 of these points in combination, the original 2006 prediction appears to be on track. By 2012, hours spent on television will be half of what they were in 2006, with sports and major live events being the only forms of programming that retain their audience.
Overall, the prediction seems to be well on track. Disruptive technologies are in the pipeline, and there is plenty of time for each of these technologies to combine into unprecedented new applications. Let us see what the second half of the time interval, between now and 2012, delivers.
The United States of America has traditionally been the most economically innovative nation on Earth, and the best place for free-enterprise and self-accomplishment. It still is, but we cannot quite say that with as much certainty as before. Where did we lose our way? Why did America stop being able to dream the greatest dreams, and do the greatest things?
All this can be reversed almost immediately if the US government, private sector, and public really want to, however. There are eight straightforward changes could push US economic growth onto a permanently higher trajectory. These are not short-term stimuli meant to postpone the present malaise, but are ideas that have separately been floating around for a long time, but without a core theme to unify them. These are also not unoriginal ideas (such as raising the retirement age in corelation with rising life expectancy), or unrealistic ideas (such as exporting violent criminals to some poor country to be detained there at low cost), even if those ideas would be effective and popular. Instead, I aim to think bigger. Each idea presented, thus, has to surpass the $1 Trillion mark in direct and indirect benefits, yet still be practical enough to implement immediately (if the mediocrity of the decision-makers in power were not a barrier).
These ideas would usher in a permanent surge in the growth rate for the next 20 years, even though some of them would also bring an immediate burst nonetheless. Most of the ideas are governmental, but there is one idea each for US corporations and for US citizens.
I hereby present a path to unprecedented prosperity for America :
1) Immigration Reform : My detailed case for skill-based immigration can be found here. In summary :
US immigration policy, at present, is exactly the opposite of what it should be. Presently, highly skilled immigrants who seek to follow the law are put through an excruciating process lasting 7-12 years, fraught with restrictions on the changing of employers and the spouse's right to work. At the same time, unskilled immigrants, many with criminal tendencies, have an incentive to enter the US illegally and consume services paid for by the US taxpayer. US prisons are filled with a disproportionate number of unskilled illegal immigrants, while the next Andy Grove, Vinod Khosla, Elon Musk, Pierre Omidyar, and Sergey Brin are faced with a tortuous, interminable ordeal that may lead them to conclude that coming to America is not as worthwhile as it was a generation ago.
If a corporation or a university can choose to accept only the best that it can get, why can't America do the same? I propose that the US allow quick and unlimited immigration for anyone with a bachelor's degree from a recognized university in their country (a list of institutions by country which the US DHS maintains on a website). This will create an influx of about 1,000,000 young, educated immigrants each year into the US, which is still lower than the number of unskilled immigrants, legal plus illegal, entering each year. It takes $200,000 to educate a child from age 4 all the way through completion of a bachelor's degree, so such an influx would effectively create a knowledge import of $200 Billion into the US each year. Only 30% of US citizens have a bachelor's degree, so these immigrants would increase the average educational level and median income of the country. Simultaneously, unskilled immigration, legal and certainly illegal, should be halted/prevented until further notice.
Every problem, from social security shortfalls to a surplus of unsold homes and cars to a lack of engineering and science talent in the US, will be solved. Healthcare cost increases would be contained as the supply of doctors, nurses, and physiotherapists rises. Every distortion caused by an aging population and the retirement of baby boomers will be offset. Political, economic, and even social/familial ties with India and China will strengthen, as most of these skilled immigrants will be from these two countries.
It is just about the most productive economic strategy that the US can employ, and would start taking effect almost immediately. The shockingly uninformed notion that such immigrants 'take jobs away' or 'depress wages' has been debunked in the detailed case, and is a belief held by reactionaries who fail to consider that the same jobs can be offshored out of the US to find their candidates if the candidate is not brought here.
2) Tax Simplification : My detailed case for tax simplification can be found here. In summary :
Time is money, and moreso than ever in a prosperous society. Before even discussing the reduction or increase in tax rates, there should first be a reduction in tax complexity. If a family earning $100,000 is currently required to pay $20,000 in income taxes to the Federal Government, so be it. But at least let the process of calculating this tax payment take 20 minutes instead of 20 hours. For a small business, preparing their taxes can consume as much as 80 hours per year. At present, the complexity of the tax code costs the US economy $400 to $600 billion a year in lost productivity and transactional wastage.
Is there any possible argument against this, aside from the need to provide loopholes to favored groups, who themselves still suffer from the complexity of the tax code, outside of their custom loophole? The present morass is a massive burden that is a disgrace to the spirit of free enterprise and unworthy of America.
3) Tax Exemption for Entrepreneurial Innovators : The reason that innovation prizes like the X-Prize are so valuable is that they evoke superlative efforts out of their contestants. This is entirely the opposite of most charities, which merely give ambition-dampening handouts to those deemed to be needy. By some measures, a $10 million X-Prize creates $500 million or more of innovation value.
However, after one team out of dozens of competitors wins a particular X-Prize of $10 Million or so, they have to turn around and pay 45% of it in income taxes. So the real prize is just $5.5 Million. If the IRS were to exempt these innovation prizes from taxation, the cost to the US government would be tiny, relative to the value of innovation that the now-larger prize would inspire.
I would take this concept further, and state that anyone who founds a successful technology company should be exempt from taxes on his shares and stock options. Effectively, a tax cut for creators of jobs, technologies, and wealth, who are known as 'change agents'. Of course, proper restrictions must be made to prevent fraud, but this stimulus would create a tremendous incentive for entrepreneurial innovation, and actually lead to higher overall tax revenue from the surplus of new jobs created, as the employees of these companies are not exempt from taxes.
This is just about the highest gain targeted tax relief that could be employed, and, if combined with idea 1), would bring the most dynamic entrepreneurs to America from across the globe (at least 40% of Silicon Valley startups are founded by immigrants, even today). For an initial cost of less than 0.1% of current tax collections, we could supercharge the economy. History has shown that a society that is unfriendly to entrepreneurship is not a society worth living in, but a society where the entrepreneur is cherished is the best society of all.
4) Make Sarbanes-Oxley Voluntary : The 'SarbOx' compliance requirements make it far more tedious for a young company to go public. For a small public company, SarbOx compliance may cost $3 million per year in auditing and legal fees, which could otherwise be spent on research and development. Even 8 years after the end of the dot-com collapse, the flow of high-tech IPOs remains a trickle, while corruption has arguably not seen any general reduction.
The solution is to make SarbOx compliance voluntary. A corporation can choose to comply, and then let the market decide whether compliance to SarbOx should result in a share price premium, or discount. If a company that has chosen not to comply to SarbOx is later found to have conducted fraud, all other companies will see their decision regarding SarbOx reflected in their prices. If a company that does not spend money on SarbOx instead outcompetes its rivals due to more R&D investment, let the market reflect that as well. The entirely different situations facing blue-chip corporations relative to fresh IPOs can thus be catered to.
5) Reform Divorce Laws : The present laws for the dissolution of marriage have resulted in millions of highly productive workers having a strong incentive not to perform at their full capacity. This is a huge opportunity cost to the economy.
Two single people pay higher combined taxes than a married couple. Beyond this, children who grow up with divorced parents tend to underachieve in many aspects of life, and become liabilities to the taxpayer. Yet, we currently have divorce laws in America that provide perverse incentives for women to leave marriages that traditionally would have been considered acceptable, and consequently for the next generation of men to not enter marriage in the first place. Thus, the percentage of adults in stable marriages continues to shrink. Incentives matter, and the present incentive structure has disastrous long-term implications.
A few decades ago, a person seeking divorce was required to provide significant justification. Now, 'no-fault' divorce grants quick divorce to either party, without any burden of justification. At the same time, the concept of alimony was meant to maintain a woman who did not have any financial security of her own, and to dissuade a man from leaving his family (i.e. when he was at fault). Both of these laws independently had merit in the era that they were passed.
However, both of these combined lead to 'no-fault alimony'. A woman can decide to not work at all while the husband is out working long hours, and still leave him on a 'no-fault' basis and still get payments from him for years, possibly forever if the marriage was long enough. Let me state that again : she decides to leave without having to provide any justification, and he still has to pay her for a very long time after that. This leads to many women abusing the law for financial gain, or at the very least, threaten the husband throughout the marriage, knowing that the power of the state is behind her. Perversely, the dutiful husbands are often the ones ruined by the machinery of the state under the current laws, while the 'bad boys' get off lightly. 70-90% of divorces are initiated by the wife due to this incentive stucture, and while feminists seek to punish 'bad boys', 'players', and 'deadbeats', it is actually the faithful, responsible men who usually suffer.
Given the extreme risks to a man entering marriage in present-day America, more and more younger men are deciding that it is simply not worth the risk. As a result, many good-hearted, average women who want nothing more than to create a picture-perfect family, will find themselves competing for a much smaller pool of men who are willing to marry, and thus many of these women will not find husbands within the window of their youth. Such market forces have accelerated the meteoric rise of the pickup artist (PUA) industry complete with seminars, coaches, blogs, manuals, support networks of 'wingmen', and hidden-camera footage of successful pickups packaged and sold as instructional courses. This is leading to an America of 'more cads, less dads'. While this may be fun for practicing PUAs, it is not a sustainable societal model for any prosperous country. Furthermore, many divorced men are forced to live off just 20% of their original income after being brutalized by the machinery of the state. The natural response from such men would be to not work as hard, but such a disincentive for productive work would be ruinous. As almost all technological inventors are men, why should an inventor paying alimony bother to invent? Why not become a PUA instead, since that is a skill that no one can take away from him?
If America (and other Anglosphere countries) make it too unattractive for men to marry, Anglosphere society will deservedly die. This is where social conservatives have been an abysmal failure, shambolically unable to see the forest from the trees. Their distracted focus on combating issues that are already done deals (abortion) or that affect very few people (gay marriage), while limiting their support of marital commitment to empty sermonizing about how marriage is 'sacred', has meekly ceded the defense of the fabric they hoped to preserve. Their sermonizing, against legally sanctioned financial incentives for divorce combined with growing misandry in the media, is about as effective as a pea shooter against steel.
The solution is to have either no-fault divorce, OR alimony, but certainly not both. Either one by itself may be fair, but the two in combination certainly is not. One of the two, preferably alimony, must end. The second solution is for social conservatives to get their priorities in order, under a new generation of leadership that understands the 21st century social and legal climate.
6) Make Tax Day One Day Before Election Day : The fact that April 15 and the first Tuesday in November are as far apart from each other as they are has itself cost the American taxpayer trillions of dollars, only due to human psychology. If, however, elections were held precisely when the taxpayer is most irate with the wastage of taxpayer funds, fiscal conservatism will immediately become the highest priority of any political candidate.
The recent 'Tea Party' protests are a step in the right direction, but are still too unfocused. If anyone with Tea Party connections is reading this, please consider pitching this idea as a mission to focus the efforts around. All other objectives of tax reduction, spending restraint, and penalties for pork-barrel wastage will automatically flow as downstream outcomes of this. This would enable ideas 2) and 3) to become realities as well. Politicians will resist this, but when cornered into a debate, they will not be able to produce any persuasive excuse that conceals their desire to maintain the profligate status quo.
As you can see, many of these are policies that have existed in America in the past - when America was ascendant. Out of these six, even one or two would create a dramatic economic boom. I have no illusions that the mediocre minds in Washington would implement (indeed, re-implement) any of these ideas, or even have the courage to uproot the entrenched interests that profit from the moribund status quo.
Related : Why Government is Set to Extinguish Silicon Valley
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However, US corporations are not blameless in all this. The shortsightedness of many senior executives costs their corporations far more money than an approach that sees beyond merely the next quarter or the end of the fiscal year.
1) A Measured Balance Between Layoffs and Salary Reductions : During economic contractions, headcount reductions are often necessary, and often facilitate the process of creative destruction and reinvention. However, too many corporations are taking an axe, rather than scalpel approach to cost-reduction, that has collateral expenses that they do not account for.
A layoff involves granting 2-12 weeks of severance pay to an employee. When hiring resumes 6-18 months later (the average duration of most recessions), the employer has to spend time interviewing new candidates, paying them a signing bonus, and training them for a couple of months. Even then, the new employee may or may not be a fit for the organization. The whole layoff and re-hiring process has great inefficiencies and large transactional costs, leading to crashes in consumer confidence and then lengthy 'jobless recoveries' in the economy.
There are also hidden costs, born by the former employee and broader society. Divorces rise after layoffs, and the combination of many tragedies at once can often lead to the final tragedy - suicide. The employer bears costs too, as an army of resentful ex-employees can join competitors, tarnish the company's reputation in this Web 2.0 era, or, in the most extreme cases, mentally snap and gun down a few of his former bosses (which does happen from time to time).
At the same time, the concept of temporary salary reductions receives an illogical, knee-jerk dismissal. The stupid claim that it 'discourages top performers' seems to assume that hearing about a divorce, suicide, or foreclosure in the life of your former colleague of many years, or the prospect of a shooting, is somehow not as discouraging.
The solution is very simple : drain the bath water out systematically, rather than throwing the baby out with it. Most corporations have a 5-point performance rating scale, with 5 being the top, 3 being adequate, and 2 or 1 leading to necessary termination. A corporation could simply implement a reduction of 0% for employees rated at '5', 10% for employees rated at '4', 20% for employees rated at '3', for two quarters, before taking the more drastic step of layoffs. If economic conditions stabilize, the salaries can be restored (which itself is quicker and cheaper than recruiting and hiring new employees). If conditions worsen further, only then begin with either a deeper reduction or layoffs.
No one gets divorced or suicidal from the ripple effects of a temporary 20% pay cut. A few may leave, but those are likely to be average performers, and are leaving by their choice (and hence do not get severance pay). In fact, most employees may not even know who got how much of a reduction, due to performance ratings being mostly confidential. The dignity of the employee is preserved, the transaction costs of firing and re-hiring are avoided, and the 'jolt' to the employee, and thus collateral damage in society, is lessened. Thus, the sharp plunge and jobless recovery cycle is greatly moderated, and the drop in consumer confidence that is found at the deepest part of the recession is avoided, which quickens the recovery itself.
Some corporations already do this, and have been more successful than their competitors over cumulative business cycles. But the concept of longer-term planning on this issue is still absent in most large employers, and it is shocking that the value of gradual staging and restoration is not recognized.
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Last but not least, there is an elephant in the room of economic reform. It is that of the US citizen, and one major aspect of the economy that is usually at the top of any list of economic issues.
1) Americans Have to Adopt Healthier Habits: It is hard to go a single day without seeing an article about healthcare reform. However, I did not put it in my list of 6 governmental ideas, as I was never quite convinced that it is entirely the government's responsibility to keep Americans healthy, or to extend their lifespan, despite their abuse of their own health. Too much of our healthcare system is built around treatment, and too little around the prevention of illness in the first place. Personal responsibility to reduce the habits that lead to disease has to be taken by the individual, and so I am going to hold the pudgy feet of the average American to the fire.
While America is the best county in the world in most ways, in terms of dietary health, it sadly is just about the worst. What North Korea and Zimbabwe are to economics, America is to healthy cuisine. So much so, that most Americans don't eat actual food at all, but rather 'food-like substances' as Michael Pollan calls them. Dismantling and rebuilding the American diet will be about as hard as dismantling the USSR and Eastern Bloc.
Cancer, cardiovascular disease, diabetes, and Alzheimer's disease are the four leading causes of death in America. We spend, directly or indirectly, about $2 Trillion a year (15% of GDP) on these four diseases. Yet, a person can greatly reduce their chances of getting all four with some very simple adaptations. For all the anguish about life expectancy not rising quickly enough, and the need for more funding for research, the old adage of a penny of prevention outweighing a pound of cure still applies. US life expectancy would rise by 5 years if all adults did the following :
1) Do not smoke at all, and only drink a little, of either beer or red wine.
2) Do not consume sugary foods or drinks, fried foods, fast foods, or too many processed foods.
3) Make sure that 80% of what you eat is fruits and vegetables of as many different varieties as possible (fresh, not canned). Dairy consumption should be moderate. Red meat should be kept to an absolute minimum (no more than 2 times a month), and should be of the highest quality.
4) Berries, mangoes, lentils, whole beans, cauliflower, cabbage, beets, carrots, turmeric, garlic, green tea, avocados, wild greens, fresh tomatoes, salmon, olive oil, flaxseeds, walnuts, cilantro, oatmeal, yogurt, and dark chocolate should be favored ahead of all other foods, for reasons too lengthy to get into here.
5) Cut every portion size by at least 10%, ideally 20%.
6) Exercise 3 times a week, for 30 minutes each.
7) Adopt a bit of yoga and meditation into your life.
That is it. Do just this, and you will gain both quantity and quality of years. No one disputes the merit of these habits, and most discussion of them centers around why the person in question lacks and discipline or willpower to stick to these habits. The death rates of cancer, cardiovascular disease, and Alzheimer's would plunge, and healthcare costs would be cut in half (saving $1 Trillion). Furthermore, since healthier foods are cheaper than unhealthy ones, another $500 Billion will be saved in consumer spending, to be better used elsewhere.
$1.5 Trillion saved per year, as well as 5 more years of life. Yet, Americans can't seem to do it, and often become hostile when it is suggested that this program is easy. It does not make much sense to whine about the lack of a cure for cancer before a person has taken the simple steps that can reduce their chances of getting cancer by 75% or more. More education through some government initiatives is not the answer. That has already been done to the extreme. You can lead a horse to water, and even force its mouth into the water, but you cannot make it drink.
Americans have to get their own health in order first, then talk about the healthcare system meeting them halfway. Currently, the healthcare system is expected to magically undo too many self-inflicted maladies, an admission most Americans are unwilling to make.
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Just eight steps to be taken, six by the government, and one each for corporations and individuals, to create the Golden Age, where US prosperity would triple between now and 2030. All of these ideas have to do with creating better incentive structures, with an underpinning of more personal responsibility. It is so simple, yet so distant.
The Drake Equation, created by astronomer Frank Drake in 1960, calculates the number of advanced extra-terrestrial civilizations in the Milky Way galaxy in existence at this time. Watch this 8-minute clip of Carl Sagan in 1980 walking the audience through the parameters of the Drake Equation. The Drake equation manages to educate people on the deductive steps needed to understand the basic probability of finding another civilization in the galaxy, but as the final result varies so greatly based on even slight adjustments to the parameters, it is hard to make a strong argument for or against the existence of extra-terrestrial intelligence via the Drake equation. The most speculative parameter is the last one, fL, which is an estimation of the total lifespan of an advanced civilization. Again, this video clip is from 1980, and thus only 42 years after the advent of radio astronomy in 1938. Another 29 years, or 70%, have since been added to the age of our radio-astronomy capabilities, and the prospect of nuclear annihilation of our civilization is far lower today than in was in 1980. No matter how ambitious or conservative of a stance you take on the other parameters, the value of fL in terms of our own civilization, continues to rise. This leads us to our first postulate :
The expected lifespan of an intelligent civilization is rising.
Carl Sagan himself believed that in such a vast cosmos, that intelligent life would have to emerge in multiple locations, and the cosmos was thus 'brimming over' with intelligent life. On the other side are various explanations for why intelligent life will be rare. The Rare Earth Hypothesis argues that the combination of conditions that enabled life to emerge on Earth are extremely rare. The Fermi Paradox, originating back in 1950, questions the contradiction between the supposed high incidence of intelligent life, and the continued lack of evidence of it. The Great Filter theory suggests that many intelligent civilizations self-destruct at some point, explaining their apparent scarcity. This leads to the conclusion that the easier it is for civilization to advance to our present stage, the bleaker our prospects for long-term survival, since the 'filter' that other civilizations collide with has yet to face us. A contrarian case can thus be made that the longer we go without detecting another civilization, the better.
Telescopic power is rising quickly, possibly at 26% a year.
Kepler Mission : Launched in March 2009, the Kepler Mission will continuously monitor a field of 100,000 stars for the transit of planets in front of them. This method has a far higher chance of detecting Earth-sized planets than prior methods, and we will see many discovered by 2010-11.
COROT : This European mission was launched in December 2006, and uses a similar method as the Kepler Mission, but is not as powerful. COROT has discovered a handful of planets thus far.
New Worlds Mission : This 2013 mission will build a large sunflower-shaped occulter in space to block the light of nearby stars to aid the observation of extrasolar planets. A large number of planets close to their stars will become visible through this method.
Allen Telescope Array : Funded by Microsoft co-founder Paul Allen, the ATA will survey 1,000,000 stars for radio astronomy evidence of intelligent life. The ATA is sensitive enough to discover a large radio telescope such as the Arecibo Observatory up to a distance of 1000 light years. Many of the ATA components are electronics that decline in price in accordance with Moore's Law, which will subsequently lead to the development of the.....
Square Kilometer Array : Far larger and more powerful than the Allen Telescope Array, the SKA will be in full operation by 2020, and will be the most sensitive radio telescope ever. The continual decline in the price of processing technology will enable the SKA to scour the sky thousands of times faster than existing radio telescopes.
These are merely the missions that are already under development or even under operation. Several others are in the conceptual phase, and could be launched within the next 15 years. So many methods of observation used at once, combined with the cost improvements of Moore's Law, leads us to our third postulate, which few would have agreed with at the time of 'Cosmos' in 1980 :
Thousands of planets in the 'life zone' will be confirmed by 2025.
Now, we will revisit the under-discussed factor of accelerating change. Out of 4.5 billion years of Earth's existence, it has only hosted a civilization capable of radio astronomy for 71 years. But as our own technology is advancing on a multitude of fronts, through the accelerating rate of change and the Impact of Computing, each year, the power of our telescopes increases and the signals of intelligence (radio and TV) emitted from Earth move out one more light year. Thus, the probability for us to detect someone, and for us to be detected by them, however small, is now rising quickly. Our civilization gained far more in both detectability, and detection-capability, in the 30 years between 1980 and 2010, relative to the 30 years between 1610 and 1640, when Galileo was persecuted for his discoveries and support of heliocentrism, and certainly relative to the 30 years between 70,000,030 and 70,000,000 BC, when no advanced civilization existed on Earth, and the dominant life form was Tyrannosaurus.
Nikolai Kardashev has devised a scale to measure the level of advancement that a technological civilization has achieved, based on their energy technology. This simple scale can be summarized as follows :
Type I : A civilization capable of harnessing all the energy available on their planet.
Type II : A civilization capable of harnessing all the energy available from their star.
Type III : A civilization capable of harnessing all the energy available in their galaxy.
The scale is logarithmic, and our civilization currently would receive a Kardashev score of 0.72. We could potentially achieve full Type I status by the mid-21st century due to a technological singularity. Some have estimated that our exponential growth could elevate us to Type II status by the late 22nd century.
This has given rise to another faction in the speculative debate on extra-terrestrial intelligence, a view held by Ray Kurzweil, among others. The theory is that it takes such a short time (a few hundred years) for a civilization to go from the earliest mechanical technology to reach a technological singularity where artificial intelligence saturates surrounding matter, relative to the lifetime of the home planet (a few billion years), that we are the first civilization to come this far. Given the rate of advancement, a civilization would have to be just 100 years ahead of us to be so advanced that they would be easy to detect within 100 light years, despite 100 years being such a short fraction of a planet's life. In other words, where a 19th century Earth would be undetectable to us today, an Earth of the 22nd century would be extremely conspicuous to us from 100 light years away, emitting countless signals across a variety of mediums.
A Type I civilization within 100 light years would be readily detected by our instruments today. A Type II civilization within 1000 light years will be visible to the Allen or the Square Kilometer Array. A Type III would be the only type of civilization that we probably could not detect, as we might have already been within one all along. We do not have a way of knowing if the current structure of the Milky Way galaxy is artificially designed by a Type III civilization. Thus, the fourth and final postulate becomes :
A civilization slightly more advanced than us will soon be easy for us to detect.
The Carl Sagan view of plentiful advanced civilizations is the generally accepted wisdom, and a view that I held for a long time. On the other hand, the Kurzweil view is understood by very few, for even in the SETI community, not that many participants are truly acceleration aware. The accelerating nature of progress, which existed long before humans even evolved, as shown in Carl Sagan's cosmic calendar concept, also from the 1980 'Cosmos' series, simply has to be considered as one of the most critical forces in any estimation of extra-terrestrial life. I have not yet migrated fully to the Kurzweil view, but let us list our four postulates out all at once :
The expected lifespan of an intelligent civilization is rising.
Telescopic power is rising quickly, possibly at 26% a year.
Thousands of planets in the 'life zone' will be confirmed by 2025. A civilization slightly more advanced than us will soon be easy for us to detect. As the Impact of Computing will ensure that computational power rises 16,000X between 2009 and 2030, and that our radio astronomy experience will be 92 years old by 2030, there are just too many forces that are increasing our probabilities of finding a civilization if one does indeed exist nearby. It is one thing to know of no extrasolar planets, or of any civilizations. It is quite another to know about thousands of planets, yet still not detect any civilizations after years of searching. This would greatly strengthen the case against the existence of such civilizations, and the case would grow stronger by year. Thus, these four postulates in combination lead me to conclude that :
Most of the 'realistic' science fiction regarding first contact with another extra-terrestrial civilization portrays that civilization being domiciled relatively nearby. In Carl Sagan's 'Contact', the civilization was from the Vega star system, just 26 light years away. In the film 'Star Trek : First Contact', humans come in contact with Vulcans in 2063, but the Vulcan homeworld is also just 16 light years from Earth. The possibility of any civilization this near to us would be effectively ruled out by 2030 if we do not find any favorable evidence. SETI should still be given the highest priority, of course, as the lack of a discovery is just as important as making a discovery of extra-terrestrial intelligence.
If we do detect evidence of an extra-terrestrial civilization, everything about life on Earth will change. Both 'Contact' and 'Star Trek : First Contact' depicted how an unprecedented wave of human unity swept across the globe upon evidence that humans were, after all, one intelligent species among many. In Star Trek, this led to what essentially became a techno-economic singularity for the human race. As shown in 'Contact', many of the world's religions were turned upside down upon this discovery, and had to revise their doctrines accordingly. Various new cults devoted to the worship of the new civilization formed almost immediately.
If, however, we are alone, then according to many Singularitarians, we will be the ones to determine the destiny of the cosmos. After a technological singularity in the mid-21st century that merges our biology with our technology, we would proceed to convert all matter into artificial intelligence, make use of all the elementary particles in our vicinity, and expand outward at speeds that eventually exceed the speed of light, ultimately saturating the entire universe with out intelligence in just a few centuries. That, however, is a topic for another day.
On April 22, 2008, I wrote about how the Energy and Financial sectors had diverged from each other, up to that point, to a degree that rarely happens between any two major sectors of the market. I proceeded to suggest a trade of shorting Energy while going long on Financials.
Let us see how that trade turned out, about 1 year after it was suggested.
Both sectors did worse than the S&P500, but as we were short on Energy, this is favorable. With dividends reinvested (which for Financials, were substantial), we come to total returns of :
So this trade earned a return of -5.36%, vs. -32.20% for the S&P500. This is a dramatic outperformance relative to the index, even though staying in cash would have been even better.
For a next step, I would cover the short on Energy, and double down on my long position in Financials, given the low current price of Financials.
The Wolfram Alpha engine is set to be launched. Rather than a search engine, it is an 'answer engine' that interprets actual questions and answers them in accordance with their intended meaning.
Here is a video demonstrating the Wolfram Alpha engine.
I have written about the Semantic Web back on June 11, 2007. The Wolfram Alpha, at first, will seem rather underwhelming, and will merely enable high-school and college students (as well as bloggers) to conduct their research more easily. But as refinements accumulate and users go through their own learning curve, we could see a major transformation in Internet usage starting around 2012.
The Wolfram Alpha will be the first mainstream experience of the Semantic Web, much as the launch of the Netscape Navigator browser in late 1994 heralded the arrival of the World Wide Web to the mainstream. The launch of the Wolfram Alpha will be a similar moment in technological progress, and while it will not be as much on an incremental jump in user experience as Netscape Navigator was, consider that when Netscape Navigator was launched, it could only be accessed by desktop PCs, as there were virtually no laptops and mobile phones in 1994. Furthermore, countries like India and China did not even have more than a handful of desktop PCs at the time. But today, in 2009, there are devices of many shapes and sizes, across many countries, than can access the Wolfram Alpha on the first day.
This does not mean that Wolfram Alpha will be the most successful Web 3.0 product. Recall how Netscape failed to win the marathon despite the early dominance, and how Google surpassed earlier search engines like Lycos, AltaVista, and Yahoo. The technology, and the trends underlying it, always supercede any one company or individual.
Thus, we have arrived at the start of the third chapter of the Internet age. Web 1.0 (the information web) ran from 1991 until 2001. 2001-03 was a nuclear winter for the Internet, which ended with Web 2.0 (the collaboration web) that ran from 2003 until 2009, and Web 3.0 (the semantic web) will begin now, in May 2009.
Anyone who follows technology is familar with Moore's Law and its many variations, and has come to expect the price of computing power to halve every 18 months. But many people don't see the true long-term impact of this beyond the need to upgrade their computer every three or four years. To not internalize this more deeply is to miss investment opportunities, grossly mispredict the future, and be utterly unprepared for massive, sweeping changes to human society. Hence, it is time to update the first version of this all-important article that was written on February 21, 2006. Today, we will introduce another layer to the concept of Moore's Law-type exponential improvement. Consider that on top of the 18-month doubling times of both computational power and storage capacity (an annual improvement rate of 59%), both of these industries have grown by an average of approximately 12% a year for the last fifty years. Individual years have ranged between +30% and -12%, but let us say that the trend growth of both industries is 12% a year for the next couple of decades. So, we can conclude that a dollar gets 59% more power each year, and 12% more dollars are absorbed by such exponentially growing technology each year. If we combine the two growth rates to estimate the rate of technology diffusion simultaneously with exponential improvement, we get (1.59)(1.12) = 1.78 The Impact of Computing grows at a scorching pace of 78% a year. Sure, this is a very imperfect method of measuring technology diffusion, but many visible examples of this surging wave present themselves. Consider the most popular television shows of the 1970s, where the characters had all the household furnishings and electrical appliances that are common today, except for anything with computational capacity. Yet, economic growth has averaged 3.5% a year since that time, nearly doubling the standard of living in the United States since 1970. It is obvious what has changed during this period, to induce the economic gains. We can take the concept even closer to the present. Among 1990s sitcoms, how many plot devices would no longer exist in the age of cellphones and Google Maps? Consider the episode of Seinfeld entirely devoted to the characters not being able to find their car, or each other, in a parking structure (1991). Or this legendary bit from a 1991 episode in a Chinese restaurant. These situations are simply obsolete in the era of cellphones. This situation (1996) would be obsolete in the era of digital cameras, while the 'Breakfast at Tiffany's' situation would be obsolete in an era of Netflix and YouTube. In the 1970s, there was virtually no household product with a semiconductor component. In the 1980s, many people bought basic game consoles like the Atari 2600, had digital calculators, and purchased their first VCR, but only a fraction of the VCR's internals, maybe 20%, comprised of exponentially deflating semiconductors, so VCR prices did not drop that much per year. In the early 1990s, many people began to have home PCs. For the first time, a major, essential home device was pegged to the curve of 18-month halvings in cost per unit of power. In the late 1990s, the PC was joined by the Internet connection and the DVD player. Now, I want everyone reading this to tally up all the items in their home that qualify as 'Impact of Computing' devices, which is any hardware device where a much more powerful/capacious version will be available for the same price in 2 years. You will be surprised at how many devices you now own that did not exist in the 80s or even the 90s. Include : Actively used PCs, LCD/Plasma TVs and monitors, DVD players, game consoles, digital cameras, digital picture frames, home networking devices, laser printers, webcams, TiVos, Slingboxes, Kindles, robotic toys, every mobile phone, every iPod, and every USB flash drive. Count each car as 1 node, even though modern cars may have $4000 of electronics in them. Do not include : Tube TVs, VCRs, film cameras, individual video games or DVDs, or your washer/dryer/oven/clock radio just for having a digital display, as the product is not improving dramatically each year.
| How many 'Impact of Computing' Nodes do you currently own? | |
| Under 10 | |
| 11-15 | |
| 16-20 | |
| 21+ | |
| Free polls from Pollhost.com | |
If this doesn't persuade people of the exponentially accelerating penetration of information technology, then nothing can.
To summarize, the number of devices in an average home that are on this curve, by decade :
1960s and earlier : 0
1970s : 0-1
1980s : 1-2
1990s : 3-4
2000s : 6-12
2010s : 15-30
2020s : 40-80
The average home of 2020 will have multiple ultrathin TVs hung like paintings, robots for a variety of simple chores, VR-ready goggles and gloves for advanced gaming experiences, sensors and microchips embedded into clothing, $100 netbooks more powerful than $10,000 workstations of today, surface computers, 3-D printers, intelligent LED lightbulbs with motion-detecting sensors, cars with features that even luxury models of today don't have, and at least 15 nodes on a home network that manages the entertainment, security, and energy infrastructure of the home simultaneously.
At the industrial level, the changes are even greater. Just as telephony, photography, video, and audio before them, we will see medicine, energy, and manufacturing industries become information technology industries, and thus set to advance at the rate of the Impact of Computing. The economic impact of this is staggering. Refer to the Future Timeline for Economics, particularly the 2014, 2024, and 2034 entries. Deflation has traditionally been a bad thing, but the Impact of Computing has introduced a second form of deflation. A good one.
Oil at $50/barrel amounts to about $1500 Billion per year out of global GDP. When oil rises, demand falls, and we have not seen oil demand sustain itself to the extent of elevating annual consumption to more than $2000 Billion per year.
Semiconductors are a $250 Billion industry and storage is a $200 Billion industry. Software, photonics, and biotechnology are deflationary in the same way as semiconductors and storage, and these three industries combined are another $500 Billion in revenue, but their rate of deflation is less clear, so let's take just half of this number ($250 Billion) as suitable for this calculation.
So $250B + $200B + $250B = $700 Billion that is already deflationary under the Impact of Computing. This is about 1.5% of world GDP, and is a little under half the size of global oil revenues.
The impact is certainly not small, and since the growth rate of these sectors is higher than that of the broader economy, what about when it becomes 3% of world GDP? 5%? Will this force of good deflation not exert influcence on every set of economic data? At the moment, it is all but impossible to get major economics bloggers to even acknowledge this growing force. But over time, it will be accepted as a limitless well of rising prosperity.
12% more dollars spent each year, and each dollar buys 59% more power each year. Combine the two and the impact is 78% more every year.
Related :
A Future Timeline for Economics
Economic Growth is Exponential and Accelerating
Pre-Singularity Abundance Milestones
The Technological Progression of Video Games
It is time for me to put forth a prediction on the shape and form of when and where the present recession will end. Recall that The Futurist correctly predicted when the recession will be deemed to have started, about 10 months before the NBER arrived at the same conclusion. Also recall that The Futurist identified the housing bubble back in April of 2006, when suggesting such a thing could get you persecuted by fanatical home-owners.
I hereby predict that :
1) The National Bureau of Economic Research (NBER) will declare the recession to have ended in the window of July-Sept, 2009. However, they only declare this retroactively, several months after the fact. The recession will thus have lasted 20-22 months in total.
2) Employment will bottom at 130 Million jobs, which means that there are still another 3 million jobs to be lost (on top of the 5 million already lost in this recession). This the steepest fall in employment of any recession in the last 50 years, even after adjusting for the size of the workforce.
3) The Unemployment Rate will top out at 10.5% +/- 0.3% early in 2010.
4) Neither deflation nor hyperinflation will happen to any significant degree. No calendar year will have an inflation rate below -2% or above 5%.
A conclusion of the recession, however, does not mean the recovery will be strong. It will take many years for the unemployment rate to fall below 5% again. It is, however, absolutely necessary for Americans to reacquaint themselves with the notions of frugality and delayed gratification, and hopefully this recession has taught a suitable lesson to enough profligate gluttons that better decisions are made in the future.
All of us remember the dot-com bubble, the crippling bust that eventually was a correction of 80% from the peak, and the subsequent moderated recovery. This was easy to notice as there were many publicly traded companies that could be tracked daily.
I believe that nanotechnology underwent a similar bubble, peaking in early 2005, and has been in a bust for the subsequent four years. Allow me to elaborate.
But immediately after the BusinessWeek cover, everything seemed to go downhill. Nanosys did not conduct an IPO, nor did any other company. Lux Capital only published a much shorter report by 2006, and stopped altogether in 2007 and 2008. No other major publication devoted an entire issue to the topic of nanotechnology. Venture capital flowing to nanotech ventures dried up. Most importantly, people stopped talking about nanotechnology altogether. Not many people noticed this because they were too giddy about their home prices rising, but to me, this shriveling of nano-activity had uncanny parallels to prior technology slumps.
The rock bottom was reached at the very end of 2008. Regular readers will recall that on January 3, 2009, I noticed that MIT Technology Review conspicuously omitted a section titled 'The Year in Nanotech' among their year-end roundup of innovations for the outgoing year. I could not help but wonder why they stopped producing a nanotech roundup altogether, and I subsequently concluded that we were in a multi-year nanotech winter, and that the MIT Technology Review omission marked the lowest point.
The recovery out of the four-year nanotech winter could not be happening at a better time. Nanotech is thus set to be one of the four sectors of technology (the others being solar energy, surface computing, and wireless data) that pull the global economy into its next expansion starting in late 2009.
Related :
For how many years have we been hearing Euro-leftists (known as EUnuchs), and US fifth-columnists whine about how the Guantanamo detention center is 'in violation of international law'? Nevermind that the terrorists happily behead civilian hostages, yet these leftists never expect terrorists to adhere to any international laws, under a 'restrictions for thee but not for me' solidarity with the terrorists.
It turns out that Barack Obama had a study done to show that Guantanamo does indeed meet Geneva convention standards of human rights. The article is in the New York Times, no less. Of course, there will be no apology from the left to former President George W. Bush. In fact, they will not even stop claiming that it violates international law (which is the false term they use to describe leftist religious doctrine).
So it turns out that President Obama will not be closing down the Guantanamo Bay detention center in the near future. At most, he will move the prisoners to a different location, technically enabling 'Guantanamo' to close and throwing the rabid leftists off the trail. Thus, we will continue to enjoy a reduced risk of terrorist attacks on US soil (there have been none for the 7 years 5 months and counting since 9/11/01, despite several attacks in Europe and Asia during this period).
In fact, another New York Times article describes how President Obama is widening his missile strikes inside Pakistan. It appears that Obama subscribes to the Bush doctrine. I am starting to like President Obama's War on Terror tactics. I must also restate an earlier prediction, however, that Obama's approval ratings will be below 50% after 90 days in office, when people find out that he is actually not a magician.
Be sure to access these links quickly when it is needed to crush a fifth-column leftist in a debate.
Related :
How We Decisively WON in Iraq in 2008
Three years ago, I wrote about the end of broadcasted television signals through the air on February 17, 2009. It was one of the earliest articles here on The Futurist, and we have now arrived at the date when this transition will take place.
In the last 3 years, we have seen the Apple iPhone (now in a 2.0 version), as well as broad deployment of 3G service to cellular phones. Neither were available in February 2006. But these are small increments compared to what access to the previously unavailable 700 MHz spectrum will give rise to. The auction for the spectrum fetched $19.6 Billion, indicating how valuable this real-estate is.
Signals sent at this frequency can easily pass through walls, and over far greater distances than signals in higher frequency bands. More importantly, since wireless is the dominant (and often only) means of Internet access in many developing countries, the innovations designed to exploit the 700 MHz band in the US will inevitably be modified to supercharge wireless Internet access in India, Latin America, and Africa. An additional 1 billion broadband Internet users in developing regions will be connected by 2013, as predicted in Part I of this article. There are few technologies that can help pull people out of poverty so quickly.
In the depths of a recession, the events that spark the next expansion arise almost unnoticed. WIthin 24 months of this event, there will be a vast array of exciting wireless products and services for all of us to enjoy. Remember that today, despite the economy being in its darkest hour, was the day that it began.
