Paul Saffo on The Revolution After Electronics
Paul Saffo spoke to Stanford’s Media X conference on the art of predicting the future. Specifically predicting which technology will come to dominate the next decade. Paul’s talk may at first seem somewhat contradictory in nature: Demonstrating how to do it, while simultaneously showing it can’t be done. This article summarises the talk.
30 Year Cycle
Every 30-50 years a new science turns into a technology. With approximate dates:
- 1900: Chemistry
- 1930: Physics
- 1960: Electronics
- 2000: Biology
We are now on the cusp of a revolution from electronics to biology. The precise inflection point, the point of change, may not yet be clear.
Paul noted that Thomas Watson’s famous misquote, “I think there is a world market for maybe 5 computers”, was made in 1953, right on the cusp of the electronics revolution: Aside from the fact that he was talking about a specific machine, and not all computers, the quote is a good example of how it is difficult to predict the future at such points of radical change.
Forecasting the Future
The goal is not to be right, but “to be wrong and rich”: It is easy to take the view that one cannot forecast. If you do attempt to forecast you will still mostly be wrong, but the very act of trying will increase your chance of success over those that do not try.
The further away from a point in time you predict into the future, the greater the level of uncertainty. The difficulty in forecasting is finding a balance between being too narrow and too broad. Forecasting might use wildcards. The “hard part” is to be wild enough.
Typically forecasts for a new product or technology’s introduction are linear: The magnitude of the amount of use of the technology is forecast to grow steadily with time.
Reality tends to be represented as an S-shaped curve: In the early stages the magnitude of use is below the expectation generated by the linear forecast. Usage then rapidly grows, such that the actual usage rises above the prediction in the later stages. The result is that in the first part, forecasters tend to over-estimate performance, while latterly they under-estimate performance. Venture capitalists tend to have linear expectations, and so are disappointed in the early stages, while failing to see the later potential.
Robots and Inflection Points
Paul Saffo used the example of DARPA’s annual competition for robot-driven cars. In the first year only a handful of competing robot drivers made it out of the starting gate. No car completed the challenge. The next year 22 out of 25 robots got further than the leader in the first race.
The example gives a quantifiable measure of how the technology is developing, year to year.
Spotting the inflection point, the place at which real, dramatic change starts to occur, can still be hard. Sometimes it can be spotted using data which has been ignored or hidden. Sometimes it is a case of looking for what does not fit. The anonymous quote, “history doesn’t repeat itself, but sometimes it rhymes”, is apt. Look back in time as far as you look forward.
The good news is that if you miss an indicator, you still have lots of time to spot another.
Sensors
Paul contested that the last three decades had been characterised by a dramatic cheapening of a component technology, which in turn had led to the widespread use of a product:
- 1980s: Cheap processors led to the processing age. The result, widespread use of PC.
- 1990s: Cheap communications lasers led to the access age. The result was the network infrastructure to support the World Wide Web.
- 2000s: Cheap sensors are leading to the interaction age. Applications are currently missing, but widespread use of robots appears to be the future.
Biology and Electronics
Electronics is building biology, and Paul expects that eventually biology will rebuild electronics: These technologies are far from isolated.
An example of developments in electronics progressing biology can clearly be seen from work on the human genome. A well funded government-backed project was beaten by a far smaller project. The smaller project was able to successfully deploy robots, with the results that the cost of the work dropped by a factor of 10 each year. The government project had been funded based on the cost of technology at the outset, and initially failed to adequately respond fully to the changing cost structure.
The creation of the first artificial genome in January 2008 may yet prove to be the inflection point.
Trust Instincts at Your Peril
“Assume you are wrong**” (** and forecast often)
Paul used the example of the sinking of a US naval fleet near Honda, on the west coast of the United States, on 8 September 1923. The fleet had been navigating using a forecasting technique called “dead reckoning”. The coastline had a (then) new technology available to assist navigation - radio direction finding. This allowed a bearing to be given between a land station and the fleet.
The radio direction finding gave an unexpected result that did not match the forecasted position. The lead boat in the fleet concluded that their position was more favourable than anticipated (closer to their destination), and turned sharply… straight into the rocks they had been trying to avoid. The 11th boat in the fleet did not trust the judgement of the lead boat, and when the fleet turned, it hedged its bets, slowing and waiting to see what happened. It was one of only 5 ships from the fleet not to run around.
The morale of the tale: Hedge your bets, but embrace uncertainty. Or as written once on a tipping jar:
“If you fear change, leave it in here.”
Divergence of the Species
The question was asked, will biotech lead to a further aggregation of wealth? Yes. The electronics revolution had itself deepened inequality. Biotech raises a particularly ugly spectre which extends beyond wealth, to life itself. The wealthy would be likely to use their wealth to extend their lives. The ultimate outcome - species divergence. Currently the rich tend to benefit from better health care, and so extend life. But biotech is likely to create a lot more options.
Michael Malone on The Protean Corporation
Michael S. Malone is perhaps best known for his work defining the “Virtual Corporation” in the early 1990s. At Stanford’s Media X conference he proposed the next iteration of organisational development - the Protean Corporation. The topic forms the basis of Malone’s next book. This article is based on his talk.
Trends
The total number of consumers is growing exponentially. Wireless broadband covers an ever-increasing amount of territory. The US may become the first truly “entrepreneurial society”, with skill-based work that never last more than a few years, where people never plan to do the same work forever: A mixture of creativity and volatility. The increasing size of the customer base will lead to larger organisations. Simultaneously, competitive threats can appear from anywhere, particularly in fast-moving technology sectors.
The result is two contradictory forces:
- Centrifugal: Technology enables workers to be spread out.
- Centripetal: Humans still need a sense of legacy and wider purpose; and are inherently social creatures. The “fatal flaw” of the Virtual Corporation was that once everything has been pulled apart, nothing is left.
Throughout history, from pre-corporations (such as early modern trading companies and guilds), through Taylorism to the virtual/adaptive/wired organisations, two trends can be seen:
- Increased autonomy of employees, with greater communication between them.
- Reduced management control.
The Protean Corporation
The paradox is simple: How to build an enterprise that lasts, while still being flexible and adaptive?
Michael used the Quantum atom to demonstrate the shape of things to come: An organic form, in constant flux, which retains its core. The design attempts to recreate the structures within Hewlett Packard, where a group of long-term employees remained at the core, with the traditional enterprise formed around them.
The Protean Corporation has three parts:
- Core
- Inner Ring
- Cloud
The Core are the permanent staff - people that have been with the business since as long as anyone can remember - “the immortals”. Their role is to protect the culture of the company, which they do somewhat informally. For example, they might be highly regarded by other employees for their experience or ability to get a result out of the organisation. Largely unseen, they are the people that make the organisation run smoothly. They may not be immediately apparent to the senior management, and as such they need to be protected from a new CEO - they are likely to be accidentally culled along with the rest of the workforce.
The Inner Ring are the traditional full time employees. They manage and operate the business. Their job is to recruit the Cloud.
The Cloud are 90% of the organisation. Their employment might last a matter of hours or days. They might work remotely, never having met their employer. The cloud is so transient that they might make errors before they have time to learn. It is critical that the Core is able to watch over the Cloud, and maintain the company’s culture and standards.
The role of the company’s board is merely to adjudicate and not to manage - to act like the company’s Supreme Court.
Competence Aggregator
The Protean Corporation will be fixed in perpetual motion. The most important role in such a corporation will be “competence aggregators”. These people pull individuals together for specific projects, much like creating start-up companies within the corporation. Competence Aggregators exist within the Cloud, but are still governed by the Core. The Competence Aggregators will be the new superstars of the economy.
Private and Public
The shape-shifting Protean Corporation can exist in both public and private sectors of the economy. To achieve this is the zenith of the concept.
A key problem remains: There is no way to accurately value the Protean Corporation. Its assets are intangible, and not reflected in conventional accountancy-based corporate market valuation. It is a similar issue to that which limits social entrepreneurs - there is no way to measure the performance of non-profit organisations. The ultimate limitation on the whole process is the lack of a market for intellectual capital.
The Protean Corporation in Practice
Wikipedia was cited as an example of a protean-like corporation.
I personally recognise the existence of both the Core, Inner Ring and Cloud from the Open Directory Project. The Core was part-formalised as “Editalls” - floating editors that had no fixed role, but which were always trusted and experienced veterans of the project. The Inner Ring consisted of “Meta” editors (and later Admins), who appointed everyone else, and took the formal leadership role. However, neither group entirely matched these roles. The Cloud, the regular editors, were just as described by Malone: The majority of the organisation, often with very limited ties to the project, many moving on after a short period of work.
The Core is also commonly found within British local government: In most long-established authorities there are a handful of people who both provide a sense of stability, and can simply get things done that nobody else can (usually through some combination of contacts and experience). Without these people I suspect that much of local government would be rendered totally dysfunctional (as close to collapse as a public body can become).
It was noted that Intel had originally shunned the concept of the Virtual Organisation, yet had subsequently developed into one “by walking backwards into it”. For example, only 20% of its “employees” are now traditional permanent staff. Far more contribute “virtually” or as suppliers. Yet all need access to company data and systems, so have to be trusted. A fifth have never met their boss face-to-face, and half of those never expect to: Such an organisation is logically already facing the challenges that the Protean Corporation seeks to answer.
