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. 

Almost 3 years ago, in October of 2006, I first wrote about Cisco's Telepresence technology which had just launched at that time, and how video conferencing that was virtually indistinguishable from reality was eventually going to sharply increase the productivity and living standards of corporate employees (image : Cisco). 

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.

This article in the San Jose Mercury News indicates what sort of savings these two corporations have earned by use of their own systems :

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 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. 

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. 

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. 

It is true that from 2001 to 2009, the US economy has actually shrunk in size, if measured in oil, gold, or Euros.  To that, I counter that every major economy in the world, including the US, has grown tremendously if measured in Gigabytes of RAM, TeraBytes of storage, or MIPS of processing power, all of which have fallen in price by about 40X during this period.  One merely has to select any suitable product, such as a 42-inch plasma TV in the chart, to see how quickly purchasing power has risen.  What took 500 hours of median wages to purchase in 2002 now takes just 40 hours of median wages in 2009.  Pessimists counter that computing is too small a part of the economy for this to be a significant prosperity elevator.  But let's see how much of the global economy is devoted to computing relative to oil (let alone gold).

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

Are You Acceleration Aware?

Pre-Singularity Abundance Milestones

The Technological Progression of Video Games

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. 

On November 11, 2007, I created an investment portfolio to be frozen at that time, and evaluated on December 31, 2008, against the S&P500 over the same period.  The portfolio incorporated principles, economic trends, and technologies discussed in other articles here on The Futurist.  Dividends were reinvested, and so the price paid reflects dividend-adjusted cost-basis.  Yahoo and Google Finance do tend to miss recording some dividends, so one must go to a more reliable site like Morningstar to account for the exact dividends. 

So how did the portfolio do?  Well, the portfolio declined by 37.1% while the S&P500 declined by 36.0%.  So we lagged the benchmark by 1.1%.  Of course, this was a year when keeping money in cash would have been superior to almost any long equity portfolio. 

As always, weightage matters just as much as selection, and the largest component, IWN, outperformed the S&P500.  However, this was dragged down by IIF and GOOG.  Had I simply followed my advice on shorting energy stocks, I would have done better, but that was not a trade in this portfolio. 

At least the 2007 Futurist portfolio outperformed the S&P500 by a greater margin than the 2008 portfolio lagged by, so we are still ahead on aggregate.  Let us see what 2009 holds. 

Related :

A History of Stock Market Bottoms

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

                                - Robert Heinlein

The secret sauce of Silicon Valley is the tradition of leaving established companies to start or join new ones, secure funding from venture capitalists, build the company to a suitable size, and then either float or sell the company for a windfall to the founders and early employees.  The incentive to continue this practice is the engine that keeps the fire of human technological innovation alive. 

Silicon Valley's unique ecosystem has so far been nearly impossible to eclipse.  The combination of research universities, the best and brightest immigrants from India and China, a culture of entrepreneurship, and a nearly perfect climate has kept the competitors to Silicon Valley at bay.  In the 1990s, the prevalent belief was that the high cost of living in Silicon Valley would enable Austin, Dallas, Seattle, and Phoenix to attract technology workers and cultivate their own tech sectors.  This did not happen, as the Silicon Valley ecosystem just had too strong of a gravitational pull. 

This, however, should not be an excuse for complacency, or a belief that Silicon Valley is a bottomless supply of tax revenue.  There are four steps that would make Silicon Valley prohibitively inhospitable to the formation of new ventures. Any one of these by itself would not be enough to dent the might of the Silicon Valley engine, but all four combined would exceed the breaking point.  The first two of these four steps have already happened, and the final two are set to happen, barring direct intervention. 

The four steps are :

1) Sarbanes-Oxley : This attempt to reduce the risk of another Enron-style fraud has inflicted a cost on the US economy greater than 100 Enron collapses.  In Silicon Valley, the crushing costs of Sarbanes-Oxley compliance (up to $3M a year) have dried up IPOs to a trickle, as the prospect of spending money of compliance that could otherwise be spent on R&D is unappealing.  IPOs are less frequent than they were even in the early 1990s, before the bubble, and start-ups can only hope to be acquired by a larger company.  In the last 8 years, only two IPOs were large enough to be considered 'blockbuster' : Google and VMWare.  This crushes the incentive to leave stable jobs to go work at a new venture. 

2) Tortuous Immigration Process : Any list of the most successful people in the history of Silicon Valley will quickly reveal that at least one third of them were born outside of the US.  In response, America has chosen to make it much harder for more such people to come here, even as the quality of life in their home countries is rising. 

While politicians pander to illegal immigrants with minimal education, they somehow refuse to make immigration easier for legal, highly-skilled immigrants who start new ventures in America.  This is significant given the fact that about half of Silicon Valley's skilled workforce is Indian or Chinese.  Many are choosing to return to their home countries when it becomes too hard to stay, and are advising their younger relatives that the US immigration process is so tedious that it is better to pursue their careers at home, working for Indian or Chinese branches of HP or Microsoft. 

Under current procedures, an engineer from India or China has to be on an H1-B visa for 6 years before he can get a greencard.  If he changes employers during that period, he has to start the clock again.  The immigrant's spouse cannot work during this period.  Even after the greencard, it takes 5 more years to become a US citizen.  More and more of the best and brightest are deciding that this 11-year limbo is not worth it, and return to their home countries (eventually starting companies there rather than in Silicon Valley).  In the 1990s, Americans had not even heard of Bangalore or Suzhou. 

I have written up a detailed solution to this problem over here. 

___________________________________________________________________________

If these two factors weren't bad enough, two more negatives are about to be piled on. 

3) California State Income Taxes are Set to Rise : The budget shortfalls and underfunded pensions in California are a ticking time bomb.  CalPERS, which invests in many of the top venture capital funds that nurture the growth of start-ups in Silicon Valley, is in a shambolic state, and has to add $80 billion in assets just to meet present obligations.  The top income bracket in California is already taxed at 9.3%, and this is set to rise.  Sales taxes are also set to rise.  Due to this horrendous mismanagement worthy of a banana republic, California will soon reach a tipping point where taxes are so high as to destroy California's private sector, which until now has been the envy of the world.  It would, of course, be better to reduce CA state expenditures, but government officials have made it clear that raising taxes is their preferred course of action. 

Victor Davis Hanson explains California's black hole in more detail. 

4) Federal Income Taxes are Set to Rise : If the Bush tax cuts are allowed to expire, then from 2011 onwards, the top income bracket will be taxed at 39.6% rather than the current 35%.  Here, too, the concept of reducing expenditures is not palatable to Washington decision-makers.  While this does affect the entire US equally, when this is combined with the increase in California Sate tax, the combined marginal tax rate in California rises several percentage points, and possibly rises well above 50%.

The danger here is that each of these factors by themselves are not life-threatening.  But all four of them in cumulative combination are deadly.  So on top of the difficulty of conducting an IPO, and the brain drain out of Silicon Valley back to Asia, if the financial windfall that a worker receives after his startup makes a successful exit is taxed at a grand total of 50-55%, fewer and fewer people will bother to toil away for years in a startup.  As a result, fewer startups will form in Silicon Valley, and instead will form in Bangalore, Shanghai, and Taipei. 

Furthermore, after these forces have been in effect for a few years a simple reversal of the higher tax rates, dysfunctional immigration policy, and Sarbanes Oxley will not simply restore Silicon Valley to its prior grandeur.  The technology centers in Asia will have achieved critical mass by then, and Silicon Valley will have permanently lost its exclusivity.  It would never recover the dominance it once had. 

Silicon Valley will be reduced to a location that still hosts the headquarters of HP, Intel, Cisco, and Google, but 90% of the employees of these corporations will be overseas, and startups will be rare.  Silicon Valley will effectively become like Cleveland or Pittsburgh, which even today host the headquarters of more than 20 Fortune 500 corporations each, but still have a lower population than they each had in 1960, and cannot attract new young people to come and live there.  Cleveland and Pittsburgh are still functioning societies, of course, but their economic vibrancy is irretrievably dead. 

This bleak outlook can certainly be reversed if prompt action is taken now.  Sadly, the current path is one that is set to have a smothering effect on Silicon Valley. 

(crossposted on Techsector)

I have written beffore about the reduction in price of solar energy, and how each succcessive price decline would deliver a new generation of adoption.  Now, we can examine some of the specfic technologies that are driving the race to affordability, and will enable solar energy to be one of the only candidate technologies to lead an economic recovery from the present downturn. 

Popular Mechanics has a roundup of five new areas of innovation in harnessing energy from the Sun.  All five promise to make solar energy competitive with the cheapest sources of fossil-fuel energy, and many of these five technologies could work in combination with each other.  The five technologies are the following :

Now, many of these technologies were invented before 2008, so this roundup does not alter the fact that 2008 was a year of very low technological innovation.  However, all these innovations bode very well for a tremendous boom in solar power starting around 2010.  Each technology has one or more startup companies mentioned in each section.  The industry consensus is that solar power becomes competitive with conventional sources of power generation by around 2011, varying by the local cost of electricity and the solar intensity of a particular region (i.e Arizona becomes cost-competitive for solar before British Columbia does).

The greatest benefits, however, will accrue to emerging markets.  Many poorer countries not only have electricity rates that are much more expensive than in the US, but these countries, being in more southern latitudes, receive greater solar intensity to begin with.  Breakeven in these markets arrives even sooner than it does for the wealthy countries at more northern latitudes.  Many villages in India, VietNam, Iraq, Egypt, and Indonesia will go from having no electricity to having photovoltaic electricity. 

Related :

Solar Energy Cost Curve

The Solar Revolution is Near

A Future Timeline for Energy

(crossposted on TechSector)

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. 

(crossposted on TechSector)

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

The Way to Debate Iraq

Deconstructing the Leftist Mind

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.

By 2004, major publications were talking about nanotech as if it was about to surge.  Lux Capital was publishing a much-anticipated annual 'Nanotech Report'.  There was even a company by the name of NanoSys that was preparing for an IPO in 2004.  BusinessWeek even had an entire issue devoted to all things nanotech in February 2005.  We were supposed to get excited. 

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.

But there are signs that nanotech is on the brink of emerging from its chrysalis.  The university laboratories are humming again, promising to draw the genie out of its magic lamp.  In just the first 12 weeks of 2009, carbon nanotubes, after staying out of the news for years, have suddenly been making headlines.  Entire 'forests' of nanotubes are now being grown (image from MIT Tech Review) and can be used for a variety of previously unrelated applications.  Beyond this, there is suddenly activity in nanotube electronics, light-sensitive nanotubes, nanotube superbatteries, and even nanotube muscles that are as light as air, flexible as rubber, but stronger than steel.  And all this is just nanotubes.  Nanomedicine, nanoparticle glue, and nanosensors are also joining the party.  All this bodes well for the prospect of catching up to where we currently should be on the trendline of molecular engineering, and enabling us to build what was previously impossible. 

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 :

Milli, Micro, Nano, Pico

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. 

Congratulations are in order to Barack Obama for becoming the 44th President of the United States.  When he first emerged at the 2004 Democratic Convention, no one thought he could topple Hillary Clinton, and go on to win the general election, just 4 years later.

And while I did not vote for him, his success proves once again that America is truly the land of opportunity, far more so than any other nation on Earth. 

Now, there are a few electoral statistics that reveal where the Democrats made the biggest gains relative to their losing effort 2004 (all data from CNN.com). 

First, in income :

What is remarkable is the the highest income bracket, earning $200,000 or more, has swung 17 points towards the Democrats.  Given that Obama wants to tax this group, this swing is remarkable.  By contrast, those earning between $100,000 and $200,000 have swung just 7 points towards Democrats.

Now, onto race :

Black turnout rose enough for them to become 13% of the vote, vs. just 11% before.  The 7-point swing in favor of Obama relative to what Kerry got is unsurprising.  But where the GOP took the biggest damage is in the Latino vote.  A 13-point loss is huge, and resulted in states like Nevada, New Mexico, and Colorado shifting from the red column in 2004 to the blue column in 2008.

Lastly, we move onto ideology :

The GOP lost 6 points of the conservative vote.  That is appalling, and if McCain was able to maintain the same 84% of conservative votes that Bush captured in 2004, the whole 2008 election would have been much closer.  This also shows that Sarah Palin, as much as we may like her, did not enable  McCain to net Bush's 2004 share of the conservative vote.  Some may contend that Palin is the reason McCain got even 78% of the conservative vote, but this is impossible to prove or disprove. 

Conclusion :

For the Republican Party to return from the wilderness in a future election (whether 2012 or 2016), they must achieve at least three of the following four objectives.

1) Win at least 55% of the votes of those earning over $100,000 a year, including at least 60% of those earning over $200,000 a year. 

2) Win at least 15% of the black vote.  Blacks are the most loyal Democratic vote bank, but this also means Democrats are so dependent on the black vote that they cannot afford to let the GOP have even 15% of it.

3) Win at least 45% of the Latino vote.  This group is growing quickly, and without it, the GOP has no future.

4) Always win at least 85% of conservatives.  A party that cannot win 85% of its own base is in trouble.  Now that Obama has won 20% of the conservative vote, he has to do their bidding as well, which is a topic I have discussed here, and is bad news for leftists. 

So, of these four, pick any three.  These four points do overlap with each other, particularly points 1 and 4, so courting multiple groups can be done simultaneously.  But until at least three of these four are accomplished, the GOP will not win again.

The Nation Bureau of Economic Research (NBER) said that the US has been in recession since December 2007.  Of course, that is precisely the time I had given here on The Futurist, except that my declaration was back in February 2008.  So I arrived at the same timing estimation, just 10 months before the Federal Government, back when knowing this would actually have been useful. 

The longest post-war recession in the US lasted 16 months, so if this recession lasts beyond April of 2009 (which it very well may), it would be the longest post-war recession the US has had.  Of course, this recession was shallow for the first 10 months, and only turned sharply lower in October of 2008, so 'duration' is not the whole story. 

At present, the consensus is that all of 2009 will effectively be recessionary, putting the recession at 24 months in total duration.  Whether this occurs or that pessimism itself is over-shooting remains to be seen. 

One of the boldest predictions ever made on The Futurist was back in May 2006, when I made a detailed case for why victory in Iraq would arrive precisely in 2008, not sooner or later.  There was also a half-time update in September 2007 to the initial May 2006 prediction over here.  This was an unusually bold prediction to make, given the state of Iraq in May 2006, which was before the Surge was even discussed. 

So now, in 2008, I am happy to declare that the United States has WON in Iraq, and has made Iraq a reasonably peaceful, functioning democracy with a strongly growing economy. 

The following five points support the declaration of victory, as per objectives detailed in the original May 2006 prediction :

1) US troop deaths are very low : US troop casualties to hostile attacks are now less than 10 per month, a dramatic improvement from as much as 100 deaths per month in the past.  The death rate is so low that the media avoids mentioning it.  Indeed, non-hostile deaths often surpass hostile deaths in certain months.  When more deaths occur due to road accidents, drowning, and training mishaps than at the hands of terrorists, the terrorists are quite ineffective.  If a country of 25 million people were against the presence of US troops, why are only 8-10 US troops being killed per month?  Many troops report not having had to fire their guns even once in the last 90 days. 

2) Iraqi deaths are low : It is very easy for terrorists to bomb schools, markets, and hotels indefinitely.  Yet even this has dropped to a level so low that the chance of being murdered in Iraq is actually lower than it is in Baltimore, Detroit, or the South Side of Chicago.  Less than 300 Iraqi civilians are being killed per month, which is remarkable in a country of 26 million people.  The Iraqi people have taken responsiblity for removing radicals from their midst, which was the most fundamental objective for installing democracy in Iraq in the first place.  Iraqi refugees, some who left as far back as during the 1980-88 Iraq-Iran War, are returning to Iraq for the first time in years.  Neither Iran nor Al-Qaeda are capable of causing major violence in Iraq anymore. 

Furthermore, many foreign terrorists have gone to Iraq in order to disrupt the nascent progress there, only to meet their deaths at the hands of the US and Iraqi militaries.  There has been a distinct drop in Al-Qaeda terrorist attacks worldwide since the start of 2007, and it is because the 'best and brightest' have all gone to Iraq and perished.  The 'flypaper' strategy has worked. 

3) The political process is stable : Iraqi elections have high voter turnout and minimal violence, with women voting in full force.  The Iraqi parliament and judiciary are functioning moderately well.  There is little to no threat of a coup.  If you consider how many cultural, regional, and sectarian forces were fighting against this outcome, the magnitude of this miracle becomes clear.  What took Germany and Japan 25 years after their defeat in WWII, Iraq has achieved in under 6 years.  Iraqi politicians are corrupt, but so are American politicians.  If Iraqi corruption is no higher than that of India (a fully functioning democracy), that is to be considered a success. 

There was scarcely a country more unlikely to function as a democracy, yet this miracle has happened.  We should be proud to have had the privilege to witness it.  This will, eventually, lead to a domino effect of greater freedom in Iran, Syria, and Jordan. 

4) The Iraqi economy is booming : This was the crux of my 2006 case for what it would take for Iraq to become a functioning nation.  History has proven repeatedly that once a certain level of prosperity is reached, a society becomes more interested in economic activity than destabilizing violence, and the general public will unite to combat elements that are bad for business.  Iraq is not at this level yet, but is on track to approach it rapidly. 

Iraq's real GDP continues to grow at about 7% a year.  Iraq's exports of oil are increasing, and the revenue amounts to thousands of dollars per year per Iraqi.  Beyond oil, industries like financial services, telecom, and solar energy are taking root in Iraq for the first time.  Internet use is surging.  Most Iraqis now have cellular phones, which is very complementary to the democratic process.  The Iraqi stock market is functional, and investor participation is increasing. 

5) US public opinion has turned around : For the first time in years, more Americans view the Iraq War as a positive endeavor than those who have the opposite view.  This psychological transition is almost as important as the actual data, as it prevents politicians from seeking to appease the public with promises of a 'cut and run' withdrawal.  Despite complete Democrratic control of the White House and Congress, they will quietly let the progress in Iraq continue.  It also paves the way for greater support of the next US military conflict, and helps bury the ghosts of Vietnam (which itself is not a conflict that the US technically lost, but that has been discussed here). 

These five dimensions of victory are comprehensive, and at this point, irreversible.  This sends anti-American fifth-columnists (8-10% of the US population) and Euro-leftists into apoplectic, writhing agony. 

It is one thing to oppose the war due to cost, or regret that we went in.  These are reasonable positions that should be respected.  It is quite another to hope for failure, to emphasize only bad news while ignoring good news, to excuse or even defend terrorists, and to condemn anyone who wants a positive outcome.  This is anti-Americanism, period. 

The anti-American fifth column previously loved to trumpet the running total of US troop deaths, as well as the monthly rate.  In order to oppose the Surge, they were quick to mention that 2007 had higher US troop deaths than 2006.  For example, see Matt Taibbi, an entertainment reporter, at 0:50 in this video.  But now that 2008 will have less than one third the US troop deaths as the previous year, these critics are silent.  Where is Matt Taibbi's admission that casualties are now low?  Anyone with any intellectual honesty would admit that the death rate is sharply lower than it was when they used that as their main argument, but a pre-requistie for being a fifth-columnist is dishonesty, so no further explanation is needed.   

Now that the most vocal opponents to the Iraq War have been trying to change the subject to hide their embarassment, their weak position is the perfect time to call them out and hold them accountable.  Do not show restraint towards those who themselves showed no restraint between 2003 and 2007.  Just as a strong offense towards Al-Qaeda hastened their collapse in Iraq, a strong offense against the fifth column will send them to the same fate as their Al-Qaeda allies.  We owe it to our troops to expose and shame those who hoped for their failure and even their deaths. 

Please submit this article to Digg, Reddit, and StumbleUpon, link to it in your own blogs, and send it to other bloggers.  Advertising the success of our mission in Iraq is a necessary ingredient of strengthening that very success.  We don't have to settle for merely having anti-Americans desist, but we have the opportunity to make this victory the graveyard of fifth-column fashionability.  By this, I mean that the Iraq victory should be proudly touted as an example of American exceptionalism prevailing against seemingly impossible odds.  After decades of hearing anti-Americans gleefully interject 'Vietnam' into every opportunity to put America down, it is our turn to do the opposite and turn 'Iraq' into a synonym for success. 

Here is a YouTube video on how to ferret out accurate information on the progress in Iraq. 

Related :

We Will Decisively Win in Iraq...in 2008, Part I, and Part II, along with the 2007 half-time update

The Way to Debate Iraq

The Winds of War, The Sands of Time

The Age of Democracy

Why the US Will Still be the Only Superpower in 2030

Each year, I post a roundup of technology breakthroughs for that year from the MIT Technology Review, and I now present the 2008 edition. 

2008 was a year of unusually low technological innovation.  This is not merely the byproduct of the economic recession, as some forms of innovation actually quicken during a recession.  Furthermore, the innovations from 2006 and 2007 (linked below) showed very little additional progress in 2008, except in the field of energy.  This also confirms my observation from February 2008 that technology diffusion appears to be in a lull. 

The innovations in 2008 are categorized below : 

The Year in Computing

The Year in Robotics

The Year in Biomedicine

The Year in Materials

What is conspicuously absent is any article titled 'The Year in Nanotechnology'.  Both 2006 and 2007 had such articles, but the absence of a 2008 version speaks volumes about how little innovation took place in 2008.  The entire field on nanotechnology was lukewarm. 

Most of the innovations in the articles above are in the laboratory phase, which means that about half will never progress enough to make it to market, and those that do will take 5 to 15 years to directly affect the lives of average people (remember that the laboratory-to-market transition period itself continues to shorten in most fields). 

Furthermore, The Wall Street Journal has its own innovation awards for 2008, but this merely confirms that 2008 was a poor year for innovation.  For example, the Tata Nano is chosen in the WSJ article, yet it is not available to consumers until mid-2009.  Let's hope 2009 has more genuine innovations. 

Into the future we continue, where 2009 awaits....

Related :

2007 Technology Breakthrough Roundup

2006 Technology Breakthrough Roundup

Recent market turmoil has many wondering when the freefall will cease, and whether we are on the brink of a new Great Depression, which is supposed to happen every 70-80 years according to Kondratieff Wave theory.  I don't believe we are on the brink of a depression, even though the present recession is already in its 10th month.  But it would be instructive to compare the current situation with prior market corrections, and judge the present situation in a historical context. 

We can first start with a chart of the S&P500, from 1950 to today.  We can see that the deepest deviations from the trendline appear to be in 1950, 1970, 1974, 1982, 1987, 1990, and 2002.  We shall term these instances as historical 'bottoms' for the stock market.  All but the 1987 bottom were in the midst of economic recessions. 

From this chart, we can see that the time period between bottoms can be irregular, with over a decade passing between them, in some cases.  1974 and 1982 appear to be the deepest corrections.  These bottoms coincide with recessions, but interestingly do not coincide with other major crises.  The Cuban Missile Crisis, Kennedy assassination, and 9/11/01 did not induce major market crashes beyond the first few days.  Now, we can take the datapoints of each of these bottoms, and chart the exponential trendline that connects them.  This is purely a chart of index valuation, with dividends not included. 

From this chart. we can see that the equivalent value of the S&P500 in 2008, as designated by the red circle, would be around the 1000 level.  As of October 10, 2008, the S&P500 is at 899, or 10% below the level of the bottoms trendline.  However, we can see that both the 1974 and 1982 bottoms are substantially below the trendline. 

The S&P500, since 1950, has delivered an 11.4% average return, with 7.7% of that in the form of a rise in the index itself, and 3.7% of the return being in the form of dividends.  If the long-term underlying growth rate of the index is 7.7%, we can chart a 7.7% compounded projection trend from each of these bottoms as another method to compare them to an approximate 2008 equivalent.  We shall start this chart from 1970. 

It is apparent that 4 of the 6 bottoms cluster around a 2009 projection of 1100-1200, but the two deepest bottoms of 1974 and 1982 project to a 2009 equivalent of only 700-750.  These should be considered the two 'mega-bottoms' that happen a couple times per half-century, with the other 4 being only smaller bottoms that happen every 7-10 years, whenever there is a recession. 

Since we are presently at 900 for the S&P500, we are about half-way between a smaller bottom and a mega-bottom.  Therefore, do not be surprised if the S&P500 does, in fact, dip into the low 700s in 2009, merely to match this correction to 1974/1982 levels.  This would be a further 20% correction from the 900 close of October 10, 2008.  It may not happen, but it certainly could in terms of historical precedent.  This also means that the Dow Jones Industrial Average would simultaneously decline to as low as 6500.  Indeed, there is no guarantee that it could not go even lower, but that would he historically unprecedented.  Even the 1932 bottom in the Great Depression was not deeper than the 1974 and 1982 bottoms, by these measures.       

The Good News :

If the thought of a further 20% decline in the S&P500 or DJIA is depressing, also consider the following :

1) After both the 1974 and 1982 mega-bottoms, the stock market promptly returned at least 60% in the next 9 months.  This also happened after the 1932 bottom within the Great Depression. 

2) Never forget about dividend reinvestment.  Dividend yields are highest when the stock market is at the depths of a bottom, and reinvestment ensures that new shares are purchased at the lower prices.  This enables the investor to enhance his returns when the recovery finally commences.  Even in the 1970s, the major indices were stuck within a flat range for a decade, but dividend yields as high as 5% enabled total returns that were substantially better. 

Considering points 1) and 2), make sure that you are in a position to capture the recovery, and are not forced to sell at the unfavorable prices of the bottom.  This means that you must a) never hold any substantial margin debt, b) be positioned across a diversifed set of securities, preferably ETFs ahead of individual stocks, and c) watch as little financial news as possible, thereby reducing your chances of panic that could lead you to take ill-considered actions.   

Tremendous profits will be made by those who can steel themselves through this purging of the weak, and are subsequently prepared for the post-bottom recovery.  Put daily volatility aside, and enjoy the historical times that we are experiencing first-hand. 

Related :

Economic Growth is Exponential and Accelerating

The Housing Bubble - 20-year Gains May Never be Repeated

(crossposted on TechSector)

I have discussed the possibility of 3-D printing of solid objects before, in this article where company #5, Desktop Factory, is detailed.  However, the Desktop Factory product can only produce objects that have a maximum size of 5 X 5 X 5 inches, and it can only use one type of material. 

On the Next Big Future blog, the author quite frequently profiles a future product capable of 'printing' entire buildings.  This technology, known as 'Contour Crafting', can supposedly construct buildings at greater than 10 times the speed, yet at just one-fifth the cost of traditional construction processes.  It is claimed that the first commercial machines will be available in 2008 itself. 

Despite my general optimism, this particular machine does not pass my 'too good to be true' test, at least before 2020.  A machine that could construct homes and commercial buildings at such a speed and cost would cause an unprecedented economic disruption across the world.  There would be a steep but brief depression, as existing real estate loses 90% or more of its value, followed by a huge boom as home ownership becomes affordable to several times as many people as today.  I don't think that we are on the brink of such a revolution.

For me to be convinced, I would have to see :

1) Articles on this device in mainstream publications like The Economist, BusinessWeek, MIT Technology Review, or Popular Mechanics.

2) The ability to at least print simple constructs like concrete perimeter walls or sidewalks at a rate and cost several times superior to current methods.  Only then can more complex structures be on the horizon. 

I will revisit this technology if either of these two conditions is solidly met. 

(crossposted on TechSector). 

I am of the belief that we will experience a Technological Singularity around 2050 or shortly thereafter. Many top futurists all arrive at prediction dates between 2045 and 2075. The bulk of Singularity debate revolves not so much around 'if' or even 'when', but rather 'what' the Singularity will appear like, and whether it will be positive or negative for humanity.

To be clear, some singularities have already happened.  To non-human creatures, a technological singularity that overhauls their ecosystem already happened over the course of the 20th century.  Domestic dogs and cats are immersed in a singularity where most of their surroundings surpass their comprehension.  Even many humans have experienced a singularity - elderly people in poorer nations make no use of any of the major technologies of the last 20 years, except possibly the cellular phone.  However, the Singularity that I am talking about has to be one that affects all humans, and the entire global economy, rather that just humans that are marginal participants in the economy.  By definition, the real Technological Singularity has to be a 'disruption in the fabric of humanity'. 

In the period between 2008 and 2050, there are several milestones one can watch for in order to see if the path to a possibile Singularity is still being followed.  Each of these signifies a previously scarce resource becoming almost infinitely abundant (much like paper today, which was a rare and precious treasure centuries ago), or a dramatic expansion in human experience (such as the telephone, airplane, and Internet have been) to the extent that it can even be called a transhuman experience.  The following are a random selection of milestones with their anticipated dates. 

Technological :

Hours spent in videoconferencing surpass hours spent in air travel/airports : 2015

Video games with interactive, human-level AI : 2018

Semi-realistic fully immersive virtual reality : 2020

Over 5 billion people connected to the Internet (mostly wirelessly) at speeds greater than 10 Mbps : 2022

Over 30 network-connected devices in the average household worldwide : 2025

1 TeraFLOPS of computing power costs $1 : 2026

1 TeraWatt of worldwide photovoltaic power capacity : 2027

1 Petabyte of storage costs $1 : 2028

1 Terabyte of RAM costs $1 : 2031

An artificial intelligence can pass the Turing Test : 2040

Biological :

Complete personal genome sequencing costs $1000 : 2020

Cancer is no longer one of the top 5 causes of death : 2025

Complete personal genome sequencing costs $10 : 2030

Human life expectancy achieves Actuarial Escape Velocity for wealthy individuals : 50% chance by 2040

Economic :

Average US household net worth crosses $2 million in nominal dollars : 2024

90% of humans living in nations with a UN Human Development Index greater than 0.800 (the 2008 definition of a 'developed country', approximately that of the US in 1960) : 2025

10,000 billionaires worldwide (nominal dollars) : 2030

World GDP per Capita crosses $50,000 in 2008 dollars : 2045

_________________________________________________________________

Each of these milestones, while not causing a Singularity by themselves, increase the probability of a true Technological Singularity, with the event horizon pulled in closer to that date.  Or, the path taken to each of these milestones may give rise to new questions and metrics altogether.  We must watch for each of these events, and update our predictions for the 'when' and 'what' of the Singularity accordingly. 

Related : The Top 10 Transhumanist Technologies

Today, September 15, 2008, represented just about a perfect day for buying new equity positons.  I am going to present my 2009 portfolio, that will be tracked over the next 15.5 months between now and the end of 2009, in relation to the S&P500 index.  My 2008 portfolio is still current, and will be evaluated at the end of 2008, so the start of this 2009 portfolio will overlap with the end of the 2008 portfolio.  To assess my track record, my 2007 portfolio delivered a superb 13.3% return, relative to just 4.3% for the S&P500 over the same period. 

For 2009, the portfolio is quite simple.  I believe that small-cap value and financial stocks are at historically compelling valuations, and have no choice but to rise.  A few major technology stocks are also at attractive valuations. 

So the portfolio will be :

This captures the following trends from previous articles on The Futurist :

The Next Big Thing in Entertainment, Part I and Part 2

The Impact of Computing

The Stock Market is Exponentially Accelerating too

I hereby sign and seal this portfolio, bought that the closing prices on September 15, 2008, to be evaluated on the last trading day before December 31, 2009.     

(crossposted on TechSector)