Are We Ready For The Change?

An IDC Analysis


New Delhi, 16 January 2005

A wave of confidence is sweeping India, to become a big world player. We are proficient with computers, at a rate faster than any country and our youth are the drivers. BSNL and MTNL have offered cheap broadband at Rs. 500 per month and that should be another fillip. We watched three smart Indian professors from Harvard discuss the future on the CNBC TV channel on 13 Jan and the message was 末 兎xpect surprises". India could be that surprise. Ratan Tata has made a car, which is set to sell in China. He has bought out Daewoo in India. There is new synergy between India and China. The Ambani痴 may fight and spoil their broth but 15 years ago they were pygmies. Mittal is set to become the No 1 Steel maker in the world. Ranbaxy is the saviour of many in Europe and USA providing latest drugs, Bharati is the telecom whiz making money as line prices have crashed and has given excellent service at low prices. India can gain by jumping on to the world's latest technology, cheaper than those who invented it and compete with them. India is therefore unwittingly rising and new players not heard of a few years ago are multinationals 末 like Biocon and Moser Baer. But are we ready to change and face the future by reading into it. This message is for every IDC visitor and Kolber's article below is pointed at our Armed Forces too. It is philosophical and without philosophy there is no progress.

Surfing The Wave Of Change

By Jonathan Kolber

We are at one of those unique moments in history when, to borrow a phrase, "everything old is swept away as in the twinkling of an eye." Tomorrow's world will be unimaginably different and those who understand it 末 anticipate it even 末 shall inherit the earth.

Sounds preposterous, doesn't it? It's not. And in retrospect 末 like everything in this world 末 it'll all seem so obvious. "If only I'd bought $100 of Microsoft stock twenty years ago," they still lament, "I'd be rich." I tell those types to stop whining. The opportunities presenting themselves now are many times as lucrative 末 and you don't need any special tools to pick them. All you have to do is open your eyes!

Change Drivers 末 the power behind this juggernaut 末 are already turning whole economies upside down 末 but a century from now? Forget about it. The world will be entirely unrecognisable. Those who surf this wave will make fabulous profits... some are already doing so. Those who ignore it will be crushed beneath it.

Okay, I know what you're thinking... you're probably wondering what I've been smoking. That's all right. When I first began to understand this, I was sceptical too. Then I was shocked. Then I started setting up technology companies! Consider this: In the next century, we'll see something like 20,000 years of change.

You read that right. The world of 2105 will be as different from today's world, as we are from the hunter-gatherers. That's because progress works like interest payments 末 it compounds. Scientists call this process "multiplicative." Every technological advance rests on the foundation of a series of advances that came before it. That's obvious. What's not so obvious is that many of these advances aren't just freestanding, they're catalytic-they transform how other fields of technology can progress.

In certain fields, the catalytic effects are going to be especially great. Included among these are future energy, nanotechnology and space development. Each of these is a Change Driver. Computers are another, with offshoots in artificial intelligence, robotics, and virtual reality, to name a few.

While you doubtlessly realize that computers pervade our lives, you may not appreciate the difference they've recently made to seemingly unrelated fields, such as biology.

Computers have recently gotten fast enough to enable something called "gene sequencing". This is a mathematical process by which a species is "decoded" like a massive jigsaw puzzle. It's broken down into specific genes, and then the functions of those individual genes is understood and mapped.

As a result, there's been more progress in understanding how biological processes function in the past 10 years, than in all of preceding history.

Raymond Kurzweil 末 the keynote speaker at the World Future Society's last annual meeting, and founder of six leading technology companies 末 has researched the progress of technology. He's established that in every measurable area the rate of progress has been doubling every two years-and is accelerating.

To understand what this means, consider the tale of the Chinese wise man. He had done something wonderful for the Emperor, who offered him a reward of his choosing. "Nothing much", the wise man averred, "just a grain of rice. Take a chessboard and put a grain of rice in the first square. Double it in the next square, and double it again with each square." The Emperor, thinking this request quite modest, readily agreed.

For the first 32 doublings, it was a modest amount. At that point-the halfway mark-the grains totalled the output of a large field. It was here that the curve began to get strange. After 32 more doublings, at the end of the chessboard, the wise man owned more grain than could be planted across the arable surface of the Earth.

Multiplicative progress is sneaky. It looks slow and even linear for the first few dozen multiplications. Then it takes off with a bang, and follows with a roar.

We're at the 32nd doubling of computer speed right now. Today's supercomputers-if they can be said to be intelligent-rival a rat's capabilities. The next few decades will see the arrival of computers that first match, and then greatly surpass human intelligence.

Right now, computers exist that can play chess as well as Kasparov, the greatest human player ever. Computers can diagnose illness as well as 90% of physicians. Computers manage investment portfolios totalling billions of dollars. Computers are starting to write short stories and poems indistinguishable from good human works. Computers have even invented things that have been awarded U.S. patents.

That's at the 32nd doubling level. This isn't the halfway point in progress. Not at all, it's a tiny fraction of 1% of where computers will be in 2070, at the end of the metaphorical chessboard.

Some still argue that computers will never "really be intelligent." They're missing the point. Remember the old saw, "If it walks like a duck, quacks like a duck and flies like a duck, it's a duck?" For all practical purposes, a computer that can perform an activity better than all but the best human practitioners can be said to be intelligent, at least in that area.

Computers are being developed that can learn. You can today walk into a toy store and buy a robotic dog made by Sony that learns and responds to your behavior. It's being sold as a "companion." Computers based on something called neural networks can even develop abstract concepts. Equipped with proper backup systems, computers don't forget, and they can transfer their knowledge quickly and completely amongst themselves.

We've been in what's called a "jobless recovery". You can't have an economic recovery without the work somehow being done. Outsourcing still represents a tiny fraction of the jobs lost. Machines have quietly replaced many of the jobs. Computers and robotics will continue to replace more of the economy's jobs whenever they cost less than people.

Considering that people are generally less reliable, can't work 24 hours a day, and expect to be paid on a regular basis; as the power of computers continues to double every year or so, the economics will shift in their favour. This is a hard truth, but a truth nonetheless. Successful investors pay attention to such truth.

I spend more time each day talking to my computer than to any person in my life. It turns my speech into words with incredible accuracy. Twenty years ago, I would have had a secretary with outstanding typing, grammatical and spelling skills to do this. The program that enables this cost $195-less than a secretary in India, were one available.

As computer capabilities continue to surpass humans in more and more areas, whole professions will disappear in the blink of an eye. Already, service professions are starting to disappear. Consider the automated checkout line at your grocery store. It's less expensive to operate than human labor. Once the public accepts this technology, grocers will offer a discount-say 5%-for using these lines. Very few clerical jobs will remain.

Soon we will start seeing automated fast food restaurants. Then automated mechanics. The so-called professions will hardly be immune. If a rat-brained computer of today can diagnose illness better than most doctors, a computer 100,000 times smarter will be the perfect expert to guide a robotic surgeon with unerring, microscopic precision at hummingbird speeds. You'll be sewn back up before you were even sure the operation had started.

Those who ignore this do so at their peril. You have no assurance that your profession of today will still pay well 末 or even exist-in 2020. Your only assurance of a high income in the future is to own assets today that grow into wealth tomorrow, so they can pay you dividends and interest. The Luddites of yesteryear got crushed, and the ostriches of today will get eaten.

We are living in an age of science fiction made real. But unlike the potboilers of yesteryear, where a single advance was worked into an otherwise normal world, we're seeing advances in diverse fields all rushing forward together, intersecting and tumbling into one another, cross-fertilizing into all kinds of bizarre and wondrous things.

Computers, genetics, robotics, artificial intelligence, outer space development, nanotecnology, future energy, virtual reality 末 these are but a few of the technologies leap-frogging each other, mutating and cross-fertilizing into ever newer and more amazing technologies. Do you know what computational genomics is? No? That's probably because it didn't exist 10 years ago. It wasn't possible until then. In 25 years, most technical disciplines will have names we can't even pronounce.

The world of 2105 won't materialize overnight. It will evolve from today's world in an ever-unfolding progression, faster and faster. The key to making a fortune from this technological tidal wave is 末 understanding that tomorrow's IBMs and Microsofts will be those companies that surf the wave, leading progress in some area crucial to human progress. Some of them exist today. I recently helped create a company to commercialise the third basic type of magnet, only just discovered.

Microsoft went from nothing to one of the world's biggest companies in just 20 years! Others will do the same in diverse fields as other change driver technologies leap ahead. Those who invest early in these companies will make staggering fortunes.

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