The future isn't what it used to be

 As a kid, one of my favorite cartoons was the Jetsons.  The Jetsons had it all, living in orbit, with a robot maid and flying cars.  They had Zoom long before the idea was realized in the real world.  The future from the viewpoint of the 1960s and 1970s was bright. 

Now, I look longingly at the Jetsons.  I still don't have a robot house cleaner or cook, still haven't been to orbit, and certainly don't have a flying car.  What we thought about innovation and what would be different in the 60s and 70s were products and locations.  What we missed were miniaturization and software gains.  Now we have free SaaS solutions, doomscrolling social media and better games, but still operate with gasoline powered cars.  Back then, it seemed like we'd conquer space and have better physical products.  Instead, we are further than ever from space (it is a dangerous place after all) and our software and services are frequently better than our physical products were twenty or thirty years ago.

This isn't a complaint, merely an observation that what appears to be likely to evolve often doesn't, and what does evolve often isn't what was expected.  Moore's law meant a far greater advance in software, but we've yet to see advances in the real, physical world anywhere near the same impact, either in performance or cost reduction.  That's why the future isn't what it used to be.

What we need is less hype and more focus on what can actually occur, a deeper sense of the trends that WILL impact the future and the physical opportunities and constraints that will redirect effort.  Further, what the old models of the future tell us is that there needs to be an actual market RETURN for investment, the government cannot simply continue to send rockets to the moon to return moon rocks and little else of subsequent value.  Transistors got smaller; therefore, we could pack more of them into smaller bits of silicon, meaning we could make smaller and less expensive equipment, leading to a democratization of devices.  This general availability of transistor radios, then bulky PCs, then handsets, opened a new market for software, hardware creating the market for software, which generated tons of data, which feeds artificial intelligence.  Now we just need to find ways to monetize the incredible depth and breadth of AI.  General intelligence helps you write papers, specific industry or process intelligence helps you reduce costs.

This, then, is a self-referencing cycle:  hardware getting smaller and cheaper, therefore more broadly distributed, opening the door for software on those platforms, which create data, which opens the door to process the data, and then eventually train models to hopefully perform work.

The real question is:  where does the next naturally self-referencing set of sequences or models arise?  If you want to predict the future, or suggest that the future will be different from what we think it will be today, there are at least four really consistent drivers of change:

• Technology, as previously discussed
• Demography, which represents who will be the customers, what their demands and needs will be, and who they are and where they are.  More on this in a moment
• Business models - how do we extract value based on the needs and convert into revenue
• Consolidation - the desire for individual devices or solutions to provide more features or replace other products

There are plenty of other drivers, but these four will suffice to tell you what the future is likely to hold.

Technology

We've dealt to some degree with technology.  The key thing to remember is that there needs to be some dramatic physical gain.  After all, we are still burning gasoline in four-cylinder engines that would be complex but not mystical to Henry Ford.  We need to either radically rethink a lot of our existing technology or find alternative technologies.  The challenge is that most of these existing technologies have deep structural investments, so it's more difficult to leave those behind.  That means we need technologies to address problems with little structural investment and to build on the platforms we already have if possible.

Demography

It's not hard to say that the future belongs to India and Nigeria if they can get their governments in order, since these are the youngest countries on the planet and have either great technical skills or raw material wealth.  However, India has been on the cusp for years and does not seem to be able to overcome its embedded caste systems and religious animosities to become what it could be, so perhaps we need to look elsewhere.

Russia, most of Western Europe and Japan will be shells of what they are now in twenty to thirty years, since their birth rates are so low, immigration is low and the barriers to entrepreneurs are so daunting.  Few new businesses are being created, and few new consumers are being born.

It will be important to not only identify the next new need or technology, but also the next growing market.  It probably won't be the US, which has its own growth challenges and some nativism going on, likely leading to lower migration.  Further, while China's market will expand, it won't become a market where exports are welcome. China will continue to grow its exporting capabilities while building its internal markets without a lot of imports.  Identifying where the consumer markets are growing (as well as the ability to spend) will become very important.

Business Models

It's not news that business models, how companies build compelling products, meet customer needs and extract value, are exceptionally important.  The real question is:  what will the new business models look like?  In the 1980s, one could argue that there were three business models:  manufacturing, distribution, retail.  With the coming of the internet and more offerings as software or services, there are more business models, more ways to make money than ever before, and more are likely to emerge.

For example, the social media platforms offer a "free" product but provide advertising to many companies to present to the people on the platform.  Simultaneously, the platforms are extracting data and packaging and selling that data onward.  An entire data-backed industry has sprung up in the last 20 years or so.  What new business models will emerge?  How will new companies extract value?

Consolidation

Have you pulled out your calculator or your stopwatch lately?  How about your compass?  Do you find that you are increasingly leaving the old 35MM camera at home?  We favor consolidation and convenience, and consumers have received that in boatloads as smart phones offer features and capabilities that replace disparate technologies, often with a "just good enough" solution that encourages you to leave the other products at home.

There are two things to note here. The first is that we want to consolidate.  Most people already have too many products and solutions in their lives.  If you can consolidate and simplify, that has an attraction for consumers.  The second thing to note is that products must be radically better than what already exists as stand-alone products, or customers will often select solutions that are easier to adopt, integrated and just good enough.

What we can say about the future

The rough outlines of the future are knowable, with certain assumptions.  Some industrial powerhouses, such as Germany and Japan, will begin to take a back seat to others, due to aging populations, sclerotic and bureaucratic governments and a somewhat self-satisfied population.  The US is in a nativist period, which isn't new (we swing between engaged and isolationist about every 30 to 40 years).  China is ascendent and is making friends or extracting value from a number of third world countries.

The real question is:  where is the economic driver in the next 15-20 years?  Which country or region that has a global interest, rather than an internal focus, will arise?  Will India step forward as has been expected for years?  Will another rising economy, such as Indonesia, Brazil or Nigeria rise up?

What new technologies or business models will emerge to shift the dynamics?  New models or technologies can shift entire economies quickly.  Need proof?  Look at the dramatic impact the advent of the internet had, or the impact of smartphones and the changes in business models and revenue flows.

The future is, as William Gibson noted, already here, just not widely distributed.  The future, also, will not be as linear and predictable as we'd like it to be.  The future, we'll learn, will shift not just technologies but economies and political power centers.