Technology Forecast - 2016

Dave Tutelman  -  July 14, 2016


My brother brought to my attention a technology forecast apparently based on a Singularity University seminar. It is very well done and I agree with much of it. But I question a number of the predictions, and have some predictions of my own (including societal implications).

On June 10, 2016, my brother Bob sent me an article which was brought to his attention by Sam Anzelowitz (an acquaintance of ours from our Bell Labs days). This article is my assessment of the forecast. I agree with much of it, but am skeptical about some of the predictions. That's OK. Any forecaster who writes it down in a public place is taking the risk of being wrong. And that is why forecasts are interesting; if it is a certainty, then everybody must know it anyway so why write it down.

So let me begin by applauding the author of the forecast for an insightful and ambitious assessment of technology.

Let me continue with a disclaimer. Almost noplace in the article am I saying, "It can't be done." Read it more as, "If you're going to do it, here are the problems you will have to solve. Some of the problems are difficult enough that I think the forecast date is unrealistic."

Who wrote it?

The first thing I did was a quick search to find out who wrote the article, because the copy Sam sent Bob did not have any attribution. That turned out to be more interesting than I expected.

Udo Gollub posted it on Facebook, and prefaced his post with "I just went to the Singularity University summit and here are the key learnings." (If the link to Facebook doesn't work for you, I have made a copy of the article.) It is a good read and not difficult; I commend it to you, preferably before you read the rest of my article.

So what is the Singularity University Summit? Singularity University is a think tank headquartered in Silicon Valley. The founder is Ray Kurzweil, who also popularized the term "the singularity". Here is Wikipedia's description of what the singularity means:
The technological singularity is a hypothetical event in which an upgradable intelligent agent (such as a computer running software-based artificial general intelligence) enters a 'runaway reaction' of self-improvement cycles, with each new and more intelligent generation appearing more and more rapidly, causing an intelligence explosion and resulting in a powerful superintelligence that would, qualitatively, far surpass all human intelligence.
Singularity University runs seminars predicting the implications of the singularity on business, society, and other future concerns. The technology forecast in the article is completely consistent with the notion of the technological singularity. Udo Gollub went to one of the "summit" seminars, and wrote this summary of what the [many] speakers were prognosticating.

But it doesn't end there. A Google search for a line or two from the article turns up several other articles, each a word-for-word copy of Gollub's summary and none of them crediting him nor anybody else (not even Singularity University). The purported authors include a priest submitting "his" article to a Catholic newsletter, two different MDs each signing a copy of the article in a health newsletter, an IT director for a food company, and the managing director for a maritime shipping company. Each claimed the article as his own. Gollub was quite candid when I contacted him and asked; he attended the seminar, then posted his takeaways in his words on Facebook. In his own words: "I wrote the article myself after the summit. It's a summary of what I learned and also some things that I have learned before." On top of that, his was the first posted of all those articles, at least according to the dates -- and Gollub's date was stamped by Facebook, not Gollub himself. This is not a court proceeding on a plagiarism charge, so I don't have to find "beyond a reasonable doubt", but Gollub has by far the most credible claim in my opinion.

What it says

The content is consistent with the story of the singularity. And I agree with most of it. Indeed, I see where it is coming from, and it is a skillful piece of technology forecasting. I have done technology forecasting professionally myself, and have an article on my site about techniques for forecasters.

However, I take issue with a few of the forecasts here. Perhaps the trend is correct for the very long term. But the article (either Gollub's interpretation from the seminar or the information he was actually given there) is shorter term -- a few years to a few decades. Forecasts like that require at least some engineering knowledge of the subject matter, not just a broad philosophy that "the singularity will happen".

So let me detail the forecasts that I would modify, along with my reasoning. I'll also flag some I emphatically agree with and want to emphasize. The rest I either agree with or I'm not enough of a subject matter expert to take a stand pro or con.

Moore's law

Yet digital cameras were invented in 1975. The first ones only had 10,000 pixels, but followed Moore's law. So as with all exponential technologies, it was a disappointment for a long time, before it became way superiour and got mainstream in only a few short years.
Moore's law is the king of learning curve trends. It affects so much of our technology. This point is emphatically correct. And, as the article says, the digital camera is not the only example that took maturing. Here are a couple of additional examples:
  • The Internet was functional in the mid-1970s. I was using email in 1977 in the normal course of doing my job. But it wasn't until the World Wide Web (in other words, browsers) came along in the 1990s that the Internet became bigger than something computer geeks used.
  • Getting phone access using your cable TV service has been feasible, both technically and economically, since at least 1979. Another study I led in 1982 showed cable TV as a feasible medium for wideband data. But it took until after 2000 before the cable "triple play" (TV, phone, and Internet data) became commonplace. The reasons were partly economical but mostly financial- and business-related.
A more familiar characterization of Moore's law is to look at actual computers over the decades. I do that in a very short survey article citing three interesting examples along the evolutionary curve.

But Moore's law has hit a slowdown, a plateau. Instead of exponential progress, today we have distinctly incremental progress.  Computing power per dollar during the six years I've had my current computer has not even doubled. Is Moore's law stalling? Has it hit a Bowers limit? Or is this just a temporary change in slope, and over the next decade it will catch up? No way of knowing today, but it will take a significant change in technology to continue on the Moore's Law slope. The current technologies (silicon transistors) and current architectures (multiple Von Neumann computer "cores" on a chip) are running into fundamental physical limits. Will quantum computing succeed? In time to get Moore's law back on track? I don't know. We'll get back to this question later, when we talk about artificial intelligence.

Before leaving this topic, it is worth reviewing why Moore's Law might be flattening out. I mentioned current technology running into fundamental physical limits. Moore's Law was originally not about computing power per se, but about the number of transistors that can be fit on a chip. It was first observed and written in 1965 by Gordon Moore, the co-founder of Intel. It has become synonymous with computing power because microprocessor chips and memory chips are the building blocks of computing power. If progress in those chips is exponential, then so is progress in computing.

So why might it be slowing down now? Transistors are made of lattices of silicon with carefully controlled impurities distributed throughout the lattice. The silicon lattice requires a significant number of atoms to enable transistor operation; just a few atoms and one impurity atom are certainly not enough for reliable transistor action. We are close to that number on today's microchips. So, in order for the exponential increase of transistors per chip to continue, one of two things must happen:
  1. Transistors must become smaller, which necessarily means fewer atoms. The laws of quantum physics would appear to suggest this would make them less reliable, less predictable. That approach is being explored by "quantum computing". There have been some successful proofs of concept, but nothing nearly big enough to do useful computing.
  2. Chips must become bigger. This is an architectural and a manufacturing process issue. The process issue is one of defect density in the creation of the chip, and is a tough nut to crack. Progess is there, but slower than we need for Moore's Law. I say a bit more about the architectural issue below.
If you're interested in more on Moore's Law, Wikipedia has an excellent introductory article.

Software

Software will disrupt most traditional industries in the next 5-10 years.

Absolutely! And I agree with many of his examples.

There will be 90% less lawyers in the future, only specialists will remain.

I'm skeptical, but it is possible. (Insert your favorite lawyer joke here, and applaud the prediction. ) My skepticism is more about the size of the shrinkage -- the 90% estimate -- than the general trend. Consider:
  • Lawyers are different! They not only practice the law, they make the law. Unless we can find some way to get the majority of our politicians to not be lawyers, they will find a way to preserve the need for lawyers -- whether they are really needed or not. This is not a technological observation. It is a fundamental problem in our evolved democracy and human nature. People study law not just to become lawyers, but also to become career politicians, and then use the law to perpetuate those careers.
  • As the manufacturing economy diminishes, the service economy increases in importance. We already know that; it's not new information. Gollub's article warns that the service economy is also in danger, and I agree 100%. But lawyers are close to the top of the food chain of the service economy. I think the routine stuff will go away or get much cheaper; routine lawyering will be replaced by AI or at least paralegals. Actually, you don't even need AI for a lot of it; even today, do-it-yourself legal papers are just an Internet search away. But 90% disappearing is too high a number. If the article had said 1/2 or 2/3, I don't think I'd argue.

Artificial intelligence

This is the central theme of the singularity, so it is natural that a seminar from Singularity University will make bold predictions here.

In 2030, computers will become more intelligent than humans.

This is the party line for the singularity. It might actually happen. It might even happen in 2030, but I'm skeptical. Here's why:
  1. Every time a computer exhibits AI, there is a large body of people (including experts) who say, "Well, that's not really intelligence," and move the goalpost. So we may in 2030 reach the 2016 goalpost, but that won't be the 2030 goalpost, and probably won't be the "runaway point" predicted as the singularity. In fact, just today I noticed an article in MIT Technology Review suggesting that we need a new Turing Test (the traditional measure of AI), because some programs can pass the old Turing test without really being intelligent. Moving goalpost!
  2. The AI people don't want to admit this, but all the significant advances I have seen in AI (since I first started following it in 1962) have been necessarily in lockstep with hardware improvement -- Moore's law. That's a strong statement, so let me explain what I see.
    • Most of the cleverness of heuristics to do AI was exhausted by 1970. From then until about 2000, almost all AI achievements came from the ability to integrate more data or search deeper "into the tree." (That would be the decision tree for diagnosis, the look-ahead tree for game playing, etc.) Not generalized techniques for "pruning the tree"; that was pretty much exhausted in the 1950s and '60s. (Note that more clever rules for evaluating positions in the tree constitute human intelligence, not machine intelligence. The computers are only applying those rules.)
    • Handling more data or searching deeper didn't take much cleverness, it took more, cheaper memory and faster, cheaper computing cycles. As Moore's law drove computing costs down and computing capability up, AI naturally followed.
    • But what about the new AI paradigm, "deep learning". It is very impressive. It is not completely new. For instance, there were proposals to do AI with neural networks in the 1960s. (Neural networks are one configuration for deep learning systems.) The hardware capabilities were not there yet. There are certainly some significant insights involved in writing deep learning programs. But the technique also depends heavily on a lot of computing power.
    The significance of this assertion: if Moore's law is actually slowing down, then the corollary is AI advances will slow down as well.
But let me hedge my bet a little. In AI's favor, the most promising AI technique today, deep learning, is implemented by massively parallel algorithms. So progress in Graphic Processing chips will also benefit AI, because GPU chips have a much larger number of smaller "cores" than the traditional CPU chip. GPU is a massively parallel hardware architecture, well matched to deep learning. But I don't see much more than an order of magnitude to be gained there... maybe 6-7 years at the rate of Moore's law. We'll need something else -- and soon -- if we are to achieve the singularity by 2030. Note to self: I could be wrong about that. GPU might be a more likely technology to enable AI than quantum computing.

Transportation

Around 2020, the complete industry will start to be disrupted. You don't want to own a car anymore.
You will call a car with your phone, it will show up at your location, and drive you to your destination.
You will not need to park it, you will only pay for the distance driven, and can be productive while driving.
Our kids will never get a driver's licence, and will never own a car.
Maybe in big cities. Maybe in the developing world. In the US, at least suburbs and rural, this is not just a technological nor economic change; it's a major cultural upheaval. 2020? No! It'll take a generation or two. Not because we can't do it, but we won't.

Unless, of course, we can't afford not to. Which is entirely possible. See "Work" below.

There have been a few technical issues that will further slow the adoption of autonomously driving cars.
  • Last week, a Tesla car beta-testing their latest self-driving software crashed and killed the occupant. There is no doubt it was the fault of the Tesla, and specifically the control system's failure to recognize a dangerous situation that a human driver would have easily avoided.
  • Even the modest electronically networked capabilities in cars have a hacking problem. Hacking automobiles has been postulated for years, and demonstrated in the past year. It's one thing for your computer to "get a virus". But malware in your car can be fatal, to you and others.
So I disagree with the author's premise, at least as applied to suburban and rural America and possibly worldwide. But granting it hypothetically, I agree with his conclusions about what it would do to the auto business, the insurance business, etc. We will get over the technical failures at some point, either by curing them or collectively deciding the benefit is worth the risk. (I think it will be some of each.) And suburban and rural America may turn out to be a negligible part of the world economy. This will probably not happen by 2020, but perhaps by 2030.

Let me also qualify my skepticism and state that my observation above is not my preference. To me personally, a car is not a symbol, not independence, not freedom, not status, not sex or "chick magnet". It is merely transportation, and I am very pragmatic about the cost and convenience of my transportation. I would welcome the future predicted by the article. But I am not a typical American in that regard. For more on that, see my article about how my New York City upbringing was affected, perhaps even dominated, by the availability of public transport.

To my surprise, the article said little about the electric car. I wonder if that was an oversight or simply an assumption that it will happen, and sooner rather than later. The part on electric power was so bullish that it was probably just assumed that everything would run on electricity. But electric cars have significant drawbacks as well as advantages.
  • One is the range problem. While the overwhelming percentage of cars does an overwhelming percentage of their driving within range of plug-in power, the electric car will not solve all of the owner's transport needs. Some small percentage of current automobile use (1%? 15%? depends on the individual) is outside the range of an electric car. Moving the owners of cars to other solutions will not be easy. Oh, the solutions exist and are not high-tech (public transport, renting long-distance cars), but are constrained by convenience or cost.
  • The electric car is viewed as an environmental plus. But there will be unintended consequences if they grow to a significant fraction of the market.

Electric power

Electricity will become incredibly cheap and clean: solar production has been on an exponential curve for 30 years, but you can only now see the impact. Last year, more solar energy was installed worldwide than fossil energy. The price for solar will drop so much that all coal companies will be out of business by 2025.

I have a real problem with this! Coal may be out of business by 2025, but it won't be because of solar power. And if coal is gone it will be replaced by other fossil fuels, oil and natural gas. (I almost added nuclear. But the lead time for nuclear -- technical, logistical, and regulatory -- is outside the proposed 2025 horizon.)

Am I denying the progress in solar? Not at all; it is most impressive. However... Solar cells can go to zero cost and 40% efficiency (the theoretical maximum), and it still won't put fossil fuels out of business by 2025. The reason is "demand availability". Solar power cannot be "generated" at night. And it is weaker at some times than others, even during the day. Look at the diagram; it shows the sun's rays impinging on a round earth. They deliver maximum brightness (maximum energy that can be turned into electricity) where they meet the earth face-on. The more oblique the impact, the more area needed to acquire the same amount of energy -- hence the less output from a solar cell of any given efficiency.

The bottom line is that, to generate 24 kilowatt-hours (KWH, the unit of electrical energy), you cannot leave a 1KW solar panel out there for 24 hours. Over a 24-hour period, there is only enough sunlight to generate about 8KWH of electricity. You only get to average about a third of the cell's capacity over a full day. We'll get back to this fraction of one-third later. It isn't absolute, but I doubt that it's more than a half, and probably not less than a quarter. In any event, one-third is a good enough starting point to look at the implications.

So what are the implications? For one, we need three times as much solar cell capability as the average electric usage would suggest. But there's an even bigger implication: we need to store 2/3 of the generated power for later use. And it's not clear we know how to do that. For now, without big progress in power storage or a worldwide grid (see below for why these would help), we are limited to obtaining only a third of our electricity from solar... At any price or efficiency.

Still using one third as the ratio of average need to solar capacity, let's look at ways we might solve this. The proposals I have seen fall into three general classes:
  1. Do what we are doing now: live with the fact that solar cannot provide more than 1/3 of the electricity we use, and generate the lion's share (the other two thirds) by other means. Today, that means fossil fuels. We might get help from other renewable sources (e.g.- wind or hydro), but not enough by 2025 to put a serious dent in the need. And the people pushing renewable eco-friendly energy seem to be the same people exhibiting paranoia about nuclear power; I don't see a nuclear initiative being successful in the 2025 time frame. Given enough time, non-fossil-fuel energy sources can probably be tapped, but not even close to the calendar of the forecast.
  2. Overbuild solar by a factor of three, and store 2/3 of the power generated. Passive electric storage means batteries. If your household uses 30KWH per day (the US average in 2014), then you need about 20KWH of battery capacity. Charge it with solar when the sun is out, and use it when the needs are greater than the power coming from the sun. Battery R&D is trying to get battery costs down to $100 per KWH, driven mostly by the electric car industry. They are not expected to get there before 2020 at the earliest, probably several years later. At $100 per KWH, we have an implied capital cost of $2000 for the storage for a typical household. That is not overwhelming, but it isn't something in the "solar power is practically free" liturgy either.

    There are other ways to store electricity. The most credible alternative to batteries that I've seen is "pumped hydroelectric". You use excess power now to run electric pumps to raise water to some higher-altitude reservoir (i.e.- convert the electric power to potential energy). When solar power isn't enough to run the household, much less the water pump, use that elevated water to generate electricity hydroelectrically.
  3. "Follow the sun." That is, have a large enough shared, solar-powered grid to have solar power anytime. Theoretically, that can be done. But it requires a round-the-world string of solar farms, so enough farms are illuminated at any given moment. Yes, you still need solar cell capacity three times as much as your average use. That's because only a third of the solar cells are powering the whole world at any moment.

    This sounds technically difficult, but that difficulty is probably dwarfed by the political difficulties. If you think about issues like national self-sufficiency, differing regulations, hacking, sabotage and terrorism, the technical problems sound easy. Not going to happen anytime soon. (At least not unless the singularity has occurred, and a benevolent artificial intelligence rules the whole world. ) BTW, there is also the fact that the energy market will have gone global; we're living with this in most products today, and I don't see why energy should be different. In fact, the oil market is global already; I suspect coal is as well, and natural gas is getting there. So I don't see why electricity should be different.
I promised to get back to that factor of three. If you just look at the geometry, it's a factor of π (3.1416....), not 3. But there are so many other tugs on the number that I've left it as three for the early discussion. Now let's look at what would make it bigger or smaller than π.
  • Smaller - Some power needs are naturally correlated with sunlight. For instance, the need for air conditioning in warm places is highly correlated with sunlight. If the power needs are dominated by air conditioning, then the factor could be much lower than 3.
  • Bigger - That argument cuts both ways.The premise of the Singularity University prediction is that electric power becomes so cheap you can use it for everything. So that should include heat. Heat is indeed a significant fraction of energy usage in many places; we just don't think of the energy as electricity. But if electricity is what makes energy cheap, then... Just as air conditioning needs in hot climates is correlated with sunlight, heating needs in cold climates is correlated with lack of sunlight. These places will need more electricity at times of less or no sunlight.
  • Bigger - Let's continue following correlation of energy usage to sunlight, to see where it leads. This same forecast postulates electric cars. The simple model would have those cars charging overnight, when everybody is sleeping. If the power needs are dominated by electric transportation, the factor might be much higher than 3.
  • Smaller - But let's be clever about transportation. Make your car solar powered, so it recharges during the day. In fact, maybe it can be self-sustaining, except for driving done after dark. Or anyplace you park may have a charging connection (solar-powered, of course), so only driving or charging after dark requires power that is not directly from solar cells.
  • Smaller - Other renewable sources might be anti-correlated with sunlight. Specifically, some studies show that wind strength is greatest at night. (Not in my area, nor any place I've visited! But I have seen a study asserting that.) If true, then a significant buildup of wind power might complement solar very nicely.
  • Bigger - (Assuming we use an energy storage approach to demand availability.) Storage is not 100% efficient. I was surprised to find that it is very efficient, but it's still not 100%. If the cost and size of battery technology renders them practical for solar energy storage, current battery technology is really good -- about 99% for Lithium Ion batteries. (Negligible loss.) If we have to go to pumped hydro, the pump can be built about 90% efficient and the turbine (to convert it back to electricity) another 90%. So we're talking about 80% efficiency for storage.Not a huge difference, but it would increase the factor.
  • Smaller - Smart mounts for solar panels. If we just look at night vs day, the factor is 2, not 3 or π. The difference is the oblique incidence of the sun's rays on the cells. If the cells were mounted on gimbals and controlled to track the sun during the day, we could make the factor lower. We couldn't reach 2, but we could improve things in the direction of 2.
  • Bigger - Statistical variation. We tend to think about the average usage as the capacity we need. Engineers for public utilities (electric, water, even telecom) know that you need more capacity to handle statistical fluctuations. If it's a very hot day, you'll need more solar power. If it's a very cold night and we have electric heating, you'll need more storage -- and more solar power to charge it. Clouds reduce the output of solar cells, so you need more cells to achieve the same power. Ete, etc, etc.

    And this gives rise to another problem: what happens if there is sustained over-usage for more than, say, overnight. We may need backup sources -- such as fossil fuel generators. The actual fuel used over the course of years may be small to negligible, but you still need the capital expenditure for the generator and the labor to keep it maintained and keep people trained and exercised in its use.
So the multiplier is probably around 3, but might be higher or perhaps even lower depending on our circumstances and how well we engineer things.
 
You may be jumping up and down now, wanting to ask, "But what about those self-sustaining, fully solar-powered homes I read about?" There may be one or two examples, but I doubt it (as of early 2016, anyway). What exists, and the popular press describes as self-sustaining, is really "zero net revenue to the power company." Not the same thing! The difference is important.

Those homes are still connected to the power grid, and buy electric power from the grid when their solar is not generating enough -- like at night. Those that are actually self-sustaining have an on-site generator, usually driven by fossil fuel. (A few may be hydroelectric or wind.) I have yet to see a home with sufficient power storage to be self-sustaining on solar alone.

But it gets worse! For a number of years, the government has encouraged solar power with subsidies and regulations:
  • They have subsidized the installation of solar panels with rebates and tax breaks. This has somewhat distorted the market. But even that is not the big factor.
  • They have required the power companies to buy excess generated solar power from homes with solar cells, and buy it at the retail rate. This is big.


Consider this diagram of  the solar-powered home model. The way it works is:
  • When there is just enough solar power to run the home, it does so and no electricity flows through the meter. Nobody pays anybody anything. But this is a rare event.
  • When there is not enough solar power to run the home (say, at night when there is no solar power), then power flows from the grid into the home through the meter, and the homeowner pays the utility for it.
  • When there is more than enough solar power to run the home, the excess solar power flows into the grid through the meter, and the utility company pays the homeowner for it. This last step is important in understanding the solar self-sufficient home.
The key here is that the solar home with enough excess capacity can toss enough power into the grid during daylight hours to pay for the electricity that it uses during the non-solar hours. That's a good thing, right? Well, maybe while solar power is rare. If solar homes become the norm, then not so much. Imagine that there are a lot of solar homes, enough to make a statistical difference, and that they each understand and use the self-sufficiency criterion to minimize their electric bill. Consider the implications:
  1. They are tossing extra electrical power into the grid that is not needed. Really! Not needed. Remember that factor of three. They are using all the power they need, and (in order for the numbers to be revenue-neutral) dumping twice as much into the grid. (1/3+2/3=1) If a third of the homes on the local grid are solar and dumping that power, then no generation is needed at all during hours of strong sunlight. If it's more solar than that, we have a power glut. This is not an academic point! In Germany, where government commitment and incentive to go solar has been very strong, power companies are actually having to pay customers to use the excess power.
  2. The utility company has a lot of infrastructure to maintain: not only generators but the transmission and distribution lines to get power to the customers. All this is capital intensive, and requires labor as well to maintain it. Turns out that the cost of fuel is only about half the cost of power for the average household; the rest is paying for infrastructure and labor. If the solar home pays nothing to the utility company, then is that fair? They are using the grid to get 2/3 of their power, but not paying anything for it. If payment were "fair", based on usage, then the solar homes would be paying for the infrastructure as well as for actual generation costs they use, minus the actual cost of the electricity they provide to the grid. (Of course, this ignores point #1, which is that enough such homes provide too much power to the grid and actually create a problem.)
Those who think power companies are evil are smiling about this. But putting power companies out of business in the short term would be disastrous, because we don't have another solution for demand-available power -- which solar power is not. Those power companies are going to be necessary until we have enough alternative power sources or storage to be demand-available on renewables alone. We're a lot further from that than 2025.

Bottom line: the only way we can get much more than about a third of our electricity from solar power is if we either solve the problem of cheap, massive energy storage or manage to build and maintain a worldwide electric grid with massive transcontinental power flow.

3D printing

3D printing The price of the cheapest 3D printer came down from $18,000 to $400 within 10 years.  At the same time, it became 100 times faster.
All major shoe companies have started printing 3D shoes.
Spare airplane parts are already 3D-printed in remote airports.
The space station now has a printer that eliminates the need for the large amount of spare parts they used to have in the past.
At the end of this year, new smartphones will have 3D scanning possibilities.  You can then 3D scan your feet, and print your perfect shoe at home.
In China, they have already 3D-printed a complete 6-story office building.
By 2027, 10% of everything that's being produced will be 3D-printed.

I believe the 10% figure. I believe 2027.  But...

I don't know how much beyond 10% it will ever get. 3D printing is ideal for certain types of manufacturing, including:
  • Custom manufacturing. Shoes are a great example. I was just successfully treated for a foot malady with custom orthotics. The fitting and manufacturing were low-tech, but I could certainly see digital scanning and 3D printing doing it in the future.
  • One-off or few-off. We will see what this means below.
  • Where distribution or delivery is a major issue, 3D printing enables digital distribution and delivery. E.g.- space station repair parts -- this has already been done. E.g.- circumvent gun control laws by putting 3D printer source files on the web to print guns -- this has also been done.
Anybody who has taken Economics 101 will instantly recognize the graph to the right. It shows manufacturing cost, the cost of producing N units assuming some fixed cost and some unit cost.
  • The fixed cost is the cost for producing zero units, and it is where the line on the graph meets the left of the chart (the y-axis, if you remember high school math).
  • The variable cost is the additional cost of producing one more unit, and is the slope of the line on the graph.
The primary economic difference between 3D printing and conventional manufacturing is the very low -- almost zero -- fixed cost. The entire fixed cost (assuming you have a 3D printer available) is the engineering required to produce the numerical control file for the printer. Since conventional manufacturing requires a similar level of engineering, let's compare them by ignoring engineering costs altogether. (Hey, I'm an engineer. If it doesn't bother me, it shouldn't bother you. )

In return, most conventionally manufactured parts have a lower variable cost ("unit cost") than 3D printing. The unit costs for 3D printing are the 3D "ink" and the per-unit amortization of the 3D printer.

I said above that we would get back to what "few-off" means when comparing conventional manufacturing to 3D printing. Here we see it quantitatively. The point where the "3D printing" line crosses the "conventional manufacturing" line is the break-even point. For fewer units, it pays to do 3D printing. For a larger number of units, it is worth incurring the tooling and setup costs of conventional manufacturing -- say, casting or machining. As 3D printing technology matures and unit costs thus go down (moving from the red curve to the purple curve), this break-even point goes up; it pays to manufacture more units with 3D printing.

How can conventional manufacturing compete? For most conventional manufacturing to win, one of two things must happen:
  1. A very large number of identical parts are required. There are surprisingly many parts with this requirement.
  2. Fixed costs can be reduced (moving from the blue curve to the green curve).
Based on these two factors, I assert that there would always be products and/or parts that are preferable for conventional manufacturing, and in fact far more conventional than 3D-printed parts will be made far into the future. One of the reasons, paradoxically, is the versatility of 3D printing. Engineers are going to use 3D printers to attack the fixed costs of conventional manufacturing. For instance, the major fixed cost of casting parts is making the specialized mold for the part. Why not make the mold itself on a 3D printer? That could substantially reduce the fixed cost. If you look at the graph again, you can easily imagine the tradeoff point not moving very much. It only requires that reduced unit costs for 3D printing are offset by reduced fixed costs for 3D-printed tooling for conventional manufacturing.

Bitcoin

Bitcoin will become mainstream this year and might even become the default reserve currency.

I don't think so. Bitcoin has severe limits on the size of the economy it can represent. It needs a major rearchitecture in order to be large enough to be the monetary system of a modest-size country, and definitely not a large industrial economy. The technocrats of bitcoin have known that for a long time, but I have not seen them committed to a new algorithm that can handle enough transactions to grow the bitcoin economy.

But perhaps the forecast is on the right track, that it really doesn't mean bitcoin literally but rather "something like bitcoin" will go mainstream. What is it about bitcoin that would make it attractive enough to become a major world currency? It has two things that make it attractive to its adherents:
  1. It is a cryptocurrency. Existing currencies are either based on some commodity (often gold), or are based on the promises of a government. Bitcoin is "backed" by computer cycles and encryption technology, not by raw materials nor a government promise.

    It is easy to see how a commodity could back a currency. In its simplest form, the coins would be made of the commodity -- e.g.- gold or silver coins. But many (most) currencies today are based on a government's promise to pay, even without having enough of the commodity to redeem all the currency out there.

    Bitcoin is "backed" by the work necessary to solve a decryption problem. In other words, the value behind it is "labor" (in quotes because the actual work is done by computers, not human hands nor minds). So it isn't restricted by the supply of gold, and it doesn't depend on the promise of a government that people might not trust.
  2. It is decentralized. There is no central bank, no regulating authority. It could be a government-free world currency.
#1 might be a good idea, if suitably redesigned. The current architecture of bitcoin limits the total number of transactions per second that can be accomplished. There are proposals for expanding it, but none have yet been adopted by the bitcoin economy. Some rearchitecture must be done for bitcoin transaction volume to rival even Visa -- much less become the basis of world currency.

#2 is a lot more questionable. A one-world or a libertarian political philosophy might want it. But there is a definite value for national reserve banks. They can set interest rates to stimulate or cool the economy. They can devalue and revalue currency, which is often necessary to maintain economic order. A completely decentralized cryptocurrency (a big bitcoin) would not serve any of those functions. My guess is that economic anarchy would not be pretty.

The idea that computing cycles will be the currency of the future is consistent with the belief system of adherents of the singularity. While bitcoin might indeed become an important player in the world economy, predicting it will at this point seems more like confirmation bias than balanced forecasting.

Business opportunities

If you think of a niche you want to go into, ask yourself, "In the future, do you think we will have that?" and if the answer is yes, how can you make that happen sooner?
If it doesn't work with your phone, forget the idea.

This is a very perceptive rule of thumb.

It also says something about our investment environment. Something toxic, in my opinion.

In the first place, it is self-described as a niche strategy. Niches make money for a while. Occasionally they make money for a decade or two. But they do not advance civilization. Pokemon GO will be gone in a year, having been a very successful niche that made someone a lot of money. It is the sort of thing that venture capitalists love: relatively little capital investment and a quick return.

But real progress requires longer-term thinking and investment. It is, as Edison famously said, "1% inspiration and 99% perspiration." (I'm both an engineer and a resident of New Jersey, so quoting Edison comes naturally.) The modern example that comes immediately to mind is Elon Musk. And it is no surprise that he is heavily invested in two of the major topics of this forecast: electric automobiles and solar power. (He is the chairman of both Tesla Motors and Solar City.) And, also not surprisingly, he is investing heavily in battery technology; he knows that it is necessary for the eventual success of both the electric automobile and solar power. It is also worth mentioning that he is the founder of Space-X, another big-risk, big-reward enterprise.

Musk is ignoring the suggestion, "If it doesn't work with your phone, forget the idea." His investment is orthogonal to working with your phone; it doesn't work with it and doesn't work against it. (Actually, success with batteries might help your phone, but that isn't what the author meant by "work with your phone".)

I'm afraid my attitude on this topic will not resonate with millennials and venture capitalists. But I sincerely believe it is correct. Significant human progress depends on undertaking large, daunting projects. Doing all the easy and fun things ("works with my phone") isn't going to advance humanity very far.

Work

70-80% of jobs will disappear in the next 20 years.
There will be a lot of new jobs, but it is not clear if there will be enough new jobs in such a short time.
Agreed! In fact, it seems to me that there will never be enough jobs again. And that is going to create substantial social upheaval.

We may not have reached the technological singularity, the point where our technological creations take over and run on their own. But we have indeed reached a point where technology (robots and AI at the top of that chain) is taking over many of our jobs. Yes, we can blame offshoring for loss of manufacturing jobs. But if all that manufacturing came back tomorrow (and some if it is actually returning to the USA), it is not clear that mass employment would be the result. The companies manufacturing in the US are making it work with industrial robots. Some manufacturing is being done with 3D printing, and more will be in the future.

By the same token, software (including, but not limited to, artificial intelligence) is displacing a lot of our knowledge jobs. The case was made in Gollub's article that the need for human lawyers is going away. (So many punch lines, so little time. ) But the market for engineers and software developers is also drying up. (A lot of that is due to offshoring today. But there is no reason to believe it won't see the same impact from AI that manufacturing did from automation.)

Health care is a large and growing industry, and currently a source of jobs -- even new jobs. But as it grows as a fraction of the total economy, we are seeing the imposition of (sometimes draconian) cost controls. And robots and AI will certainly vie for currently human jobs in health care. Gollub's article gives a number of examples where this is already happening. Right now, technology "helps" doctors and nurses, but enough help can turn into "replacement" eventually. I'm not an expert on healthcare nor its technology, so I don't have anything to add to the conversation. But I can read handwriting on the wall.

When I point out to well-read friends that machine productivity (both manual and mental) is creating unemployment and will continue to increase unemployment, one of them always tells me that Economics 101 teaches that increased productivity always eventually leads to higher employment, not lower. Not just a historical observation, but provable in the mathematics of economics. So I looked up the proof. Found several versions in different places. All the proofs depended on a fundamental economic assumption: elasticity of demand. That means that, if the price decreases, people will buy more of it. Without elastic demand, it doesn't follow that increased productivity results in increased employment.

We may no longer live in a demand-elastic world, or we might not in the future (especially after the singularity). If all the goods and services the population needs can be provided by significantly less than the full population, an increase in productivity (fewer people needed to provide the same good or service) does not necessarily mean an increase in demand. All it means is a decrease in employment necessary to provide it.

But there's another argument that unemployment will increase permanently. Historically, automation may have done away with some jobs but created new ones. Usually the new jobs are better jobs than the old ones they replace. I hope this happens. But the jobs I see being created are those of designing, making, and maintaining the instruments of automation, those instruments being robots and AI. Yes, those are "better" jobs than the ones the robots and AI displaced; they require more education and training, and would be [presumably, but not with certainty] better paying. But they would also be fewer. Think about it. No company is willing to automate (spend dollars on capital equipment) if they get the same output with the same payroll. Spending on automation goes up only if the cost per unit goes down. And, unless there is considerable elasticity in demand, if unit cost goes down, then total cost (and total payroll) will also go down.

So the new jobs will have to be in new industries yet to be envisioned. I hope they are there. I am not confident they will be.

If unemployment is constantly growing and the problem is structural and not temporary, we need to find a different form of society. We have been wrestling with the economics and morality of "welfare" for more than a century. If my interpretation of where technology and industry are going is correct, then the welfare problem will move from chronic to acute. There will be a large and growing segment of the population that is unemployed. It won't be for lack of ambition or discipline. It won't be for lack of education, knowledge, or training. It will be because we don't need as many workers to maintain the tangibles of civilization.

Today there are opposing and equally valid prevailing opinions about welfare:
  • It should be sufficiently generous to provide a life with dignity and self-esteem.
  • It should be sufficiently frugal to incent those who can work to do so.
If technology leads to the future I see, we will need to find a way to reconcile these opposing views. Welfare will need to do both. We will need fewer workers, but talented ones. Entrepreneurs, idea people, and those with the needed skills should be able to exercise those talents to live a better life than most, in exchange for their contributions. But just minimal subsistence for the unemployed would result in a tense accommodation at best and class warfare at worst. For more on a related issue...

Longevity

Right now, the average life span increases by 3 months per year.

Four years ago, the life span used to be 79 years, now it's 80 years.

The increase itself is increasing, and by 2036, there will be more than a one year increase per year. So, we all might live for a long, long time, probably much longer than 100.

This is presented as a blessing. If you agree with me on the previous topic, you have to take the blessing with a grain of salt. Longevity means a larger population, which probably means more unemployed. I'm not saying don't work on longevity; I'm 75, and I want to push longevity personally. But I am saying that longevity will exacerbate the unemployment and welfare issues.

This increased population also means we will need all the agricultural tech that the forecast postulates. (I'm not at all knowledgeable about agriculture; I'm not qualified to comment on that part of the forecast.) If we can't do that, then Malthus will not have been wrong in his dire predictions, just early by a few centuries. The fact that we are a few centuries past his deadline gives me cause for hope.

Education

The cheapest smartphones already cost $10 in Africa and Asia. In 2020, 70% of all humans will own a smartphone.
That means everyone has the same access to a world-class education.
Every child in the world will be able to use Khan Academy to learn everything children in First World countries learn.

Show me where this actually works. In the US, the smartphone and Internet are widespread. My observation is that it provides education for a small percentage of the users, and dumbs down the rest. I'd love to be shown otherwise, but that is my impression, based on no formal knowledge nor expertise, just common observation. I don't know anybody without skin in the game who will argue that the smartphone is currently making our society smarter, on average.

Conclusion

This article is a critique of a technology forecast based on a seminar hosted by Singularity University. That forecast is predictably consistent with SU's major tenet that, sooner rather than later, artificial intelligence will grow without bound and make our lives much better. My critique agrees with much that is said. But I question the time frame of some of the predictions; we aren't nearly ready to move ahead with them. I also have some skepticism about the generalization of AI that the singularity requires; I don't see progress at the rate predicted, and I don't know that AI will ever be sufficiently "aware" to attack problems it hasn't been asked to solve. Finally, I throw in some caveats about societal implications of the forecast.



Last modified  -  July 23, 2016