...we can project that the average home of 2025 will have various wonders. Multiple ultrathin TVs hung like paintings, robots for menial cleaning, VR-ready goggles and gloves, sensors and microchips embedded into clothing, table-sized surface computers, intelligent LED lightbulbs with motion-detecting sensors, and a 3D Printer, to name a few. The home network of at least 15 nodes manages the entertainment, security, and energy systems of the home simultaneously.
At the industrial level, the changes are even greater. Just as with telephony, photography, video, and audio before them, we will see medicine, energy, manufacturing, media, and legal industries become information technology industries, and thus set to advance at rates much faster than before. The economic impact of this is staggering.
The authors link to an article by Mark Perry, written at Christmas time in 2014. Perry points out,
For an American consumer or household spending $750 in 1964, they would have been able to purchase the 21-inch color TV/entertainment center from the Sears Christmas catalog pictured above (includes phonograph and AM/FM radio). An American consumer or household spending that same amount of inflation-adjusted dollars today (about $5,600) would be able to furnish their entire kitchen with 5 brand-new appliances (refrigerator, gas stove and oven, washer, dryer, and freezer) and buy 7 state-of-the-art electronic items for their home (a Toshiba Satellite 14″ laptop computer, a Garmin 5 Inch GPS, a Canon EOS Rebel T5 DSLR Camera, a Sony 1,000 Watt, 5.1-Channel 3D Smart Blu-Ray Home Theater System, a Sharp 50 inch LED HDTV, an Apple iPod Touch 32GB MP3 Player, and an Apple iPhone 6 [with 2-year contract]). And of course, even a billionaire in 1964 wouldn’t have been able to purchase many of the items that even a teenager can afford today, e.g. laptop computer, GPS, iPhone, digital camera.
As much as we might complain about a slow economic recovery, the decline of the middle class, stagnant median household income, rising income inequality and a dysfunctional Congress, we have a lot to be thankful for, and we’ve made a lot of economic progress in the last 50 years as the example above illustrates, thanks to the “magic and miracle of the marketplace.”
Back to the article by
There is insufficient understanding of Joseph Schumpeter’s concept of ‘Creative Destruction’, where the process of technological change topples existing norms and replaces them with new ones in a new power hierarchy.Read more here.
Proceeding to the present, it is not technological disruption that is new, but the exponentially rising rate of change means more sectors, businesses, and lives are being transformed at greater speed through an ever-widening cascade of disruptions.
Incumbents often go to great lengths to suppress disruptions, even if they themselves attained the position through some previous disruption. Whenever an incumbent industry has a misguided belief that disruption can be prevented outright by going to the government to get protectionist barriers erected around it, that industry merely experiences a temporary delay in the disruption, after which the reversion to the trendline is necessarily sharper. The script unfolds predictably. The incumbents focus more on political favors than innovation, which is usually a poor strategy when multiple industries are simultaneously seeking favors from the same government. In the meantime, the successors ascend to great heights at a speed the regulatory complex cannot handle, and the entire situation becomes more headline-grabbing than it otherwise may have been. Examples of such industries include publishing, taxis, and universities, all of which predictably ended up seeing their disruption happen in a compressed time, with the post-disruption landscape ending up where the general trendline would have predicted anyway.
Just a few of the examples of creative destruction that are currently underway include :ust a few of the examples of creative destruction that are currently underway include :
1) ...Artificial Intelligence (AI), after decades of quiet progress unnoticed by those outside the field, is now on the brink of making an immense economic impact.
2) 3D Printing accelerates many aspects of design, prototyping, and manufacturing, enabling greatly improved or even entirely new processes, products, and services.
3) ...Computing itself is on the brink of its first major transition in about 60 years.
4) ...Education, both higher and lower, is being disrupted by the day.
5) ...The transportation sector is currently a nexus of several simultaneous technological overhauls. Strong, light nanomaterials are entering the bodies of cars to increase fuel efficiency and safety. Engines are migrating to hybrid and electrical forms and reducing energy wastage through new design innovations. New models of ride-sharing such as Uber will alter assumptions about car ownership while monetizing unused seats. The declining price of computing ensures that the timeline for luxury features to trickle down to average cars continues to compress. The $25,000 car of 2020 will be superior to the $50,000 car of 2000 in almost every technical measure.
6) ...The financial services industry...
7) ...In the healthcare sector, there are a number of disruptions seeking to crack the innovation-obstructing walls erected across the industry in country after country.
8) ...The energy sector...
9) ...After decades of stagnation, space exploration is finally seeing a handoff from being the exclusive endeavor of 3-4 major governments to being a target for private enterprise. Private spaceflight is becoming cost-effective through companies like Elon Musk’s SpaceX. From these flight capabilities, asteroid mining might be a decade away from yielding trillions of dollars of valuable elements from nearby asteroids.
...These disruptions are just some of the examples in the pipeline for the next few years, shaking the foundations of old, rigid structures. The common theme among all of them is their deflationary nature, and their process of destroying certain types of jobs while creating other jobs elsewhere at higher renumeration. This is creative destruction at its finest.
h/t Sara Hoyt at Instapundit
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