by Roger Bourke White Jr., copyright August 2013
The Next Big Thing (NBT) is a positive feedback industry -- the more we invest in it, the more our economy grows. Examples from the first half of the 20th century are railroads, steel, and labor-saving household appliances. Examples from the 2nd half are electronics and software.
The positive feedback sustains a boom. And the boom runs out of steam when the positive feedback is replaced with diminishing returns. When that happens the economy dips into recession as businesses and governments search for the following NBT that will replace the busted current NBT.
What follows in this essay are some more speculations on what the next NBT will be like. (I wrote about this in 2007, this is an update.)
As a new technology becomes widely accepted it changes how people do things. The changes can be straightforward -- they can let people do what they've always been doing but faster, better and cheaper -- but more often they are surprising -- they let people do new things in new ways. Example: Advancing refrigeration technology produced home refrigerators, a straightforward change from the previous ice boxes. This change allowed a larger variety of foods to be stored for longer periods at home. This changed what was offered at supermarkets, but that change alone had low impact. It also allowed TV dinners to thrive, a surprise application which changed how family meals were conducted. This was a higher impact change and a surprising one.
The surprising changes are a disruption. They change how things are done, and they change the society's "winners" and "losers". The TV dinner winners were moms and those who wanted to eat at odd hours. The loser was the sit-together family dinner. The moral: The spreading around of a significant new technology is a scary thing for many of those experiencing it. A melodramatic example of a scary change is when an old widow is told she must leave the house she's been living in for twenty years because a railroad needs the land.
Because of the positive feedback, when an NBT industry is at the core of a change there's intense economic pressure to implement it quickly. "This change is going to be profitable! It's going to bring well-paying jobs to the community! Let's get at it!" This means the social changes become intense, which builds the social unrest surrounding it as well. There was mild discussion about the effects of TV dinners during the 50's and 60's, but that was it: TV dinners were not positive feedback, they were not an NBT industry. Steel, autos, and railroads, on the other hand, were pushed hard and created such intense controversy that whole new political philosophies were evolved to deal with the changes they caused. Coping with the social stress caused by the positive feedback of these industries (rapid industrialization) spawned the popularity of Liberalism, Capitalism, Socialism, Communism and Fascism.
These stressors of the first half of the 20th century were called heavy industry. They were called that because to implement them called for sucking up lots of money, land and other resources. The "heavy" referred to their capital requirements.
The stressors of the second half -- electronics and software -- were different. They were medium and light industries. They sucked up intellectual talent much more than anything else -- think the Information Age. And this made a big difference in how much and the style of social stress they caused. It was much lower and milder. In terms of dealing with disruptive positive feedback technologies, the Boomers and Gens have gotten off a lot easier than their predecessor population cohorts did.
"What Am I here to do?"
The deep stress of any disruptive boom is that it changes the answer to this question for many people in the community. When agriculture replaces hunting and gathering the answer for most people changes to "I'm a farmer." and "I'm a farmer's wife." A few people of the community pick up other answers such as "I'm a priest." When industrialization replaces agriculture the common answer changes again, and becomes a lot more varied.
This answer changing is deeply scary for most people, rich and poor, high and low alike. "OK... if I'm an [X] what do I do?" People have to learn new ways and this is even more frustrating for adults than it is for kids. And when the answer is some variant of, "Umm... I'm not sure. We're still figuring this out." the frustration triples.
This is why booms are usually socially stressful as well as financially stressful.
With all of the above in mind, what's coming next?
In these early 2010's we are still searching for the next generation of NBT's. This is why the economic growth has been so anemic throughout the developed world since the 2007 bust. Anti-terrorism, housing, and "green" are not positive feedback industries, so what we invest in these is not firing the economy. This means that, in fact, the last boom ended in the 1990's. The "boom" of the 2000's was a war-and-mortgage powered bubble, not an NBT-powered boom.
What comes next has not been easy to find. That means it will most likely be "heavy" and quite disruptive. We got off easy in the last part of the 20th century with the "medium" of the electronics and software boom. It's not likely to be so easy the next time around.
Here are some possibilities:
o Another round of intense industrialization that adds even more automation to manufacturing and service processes. This will let us make more kinds of things and services faster, better and cheaper -- very positive in its feedback. The gotcha is that it does so without increasing human employment, so the world gets more, but people work less. This sure qualifies as disruptive and its not clear who the new winners will be. One loser will be the linkage between self-worth and a good paying job in service or manufacturing.
o Another transportation revolution built around driverless cars. This will involve not just redesigning cars but also roads, road networks, and parking. The current light-rail-and-bicycle schemes are resource saving but not positive feedback. These won't sustain a boom, but driverless cars may. They will if they transform the car use culture into something much more transparent and effortless. Welcome to a world of ninety percent robot-driven taxis and trucks, driving over a newly designed, much more efficient, road network -- one that doesn't routinely traffic jam -- think Boston transformed into LA, and LA into a Hollywood movie dream. The losers in this transformation will be pride of car ownership and driving skills, and the existing road network that is so familiar to all who use it.
o A transportation revolution built around rationalizing air travel and air traffic. Getting on and off airplanes run by commercial airlines remains a seriously clunky process. Flying these airplanes through the air with existing air traffic control technology is equally clunky. The revolution here will transform flying into something much more like light rail riding -- get on and off fast -- and get the planes from Point A to Point B in much simpler ways. The revolution will also transform airports into something much simpler to deal with and more numerous. The loser here is current airport rituals which are in place in the name of air flying security, but in fact are servicing the fear of flying emotion that many passengers have. The rituals I call Worshiping at the Altar of the Holy Metal Detector, with the TSA being the priesthood.
o A healthcare revolution. Healthcare is positive feedback. It helps a person work more consistently and for more years at what they are good at. We are rapidly learning so much more about how life works, but we are being slow at transforming this knowledge into tangible products that help humans stay healthier, which means the positive feedback is blocked. The revolution here will be delivering healthcare without the encumbrance of professional guilds and the insurance-centric procedural framework. The losers will be the existing healthcare providing infrastructure, and the current rituals for getting healthcare -- health insurance as we know it today. I have written more about this as the concept "Patient Pays". The winners will be the more numerous health care employees. This will continue to be a growth industry for people as well as machines. Health care has a lot of emotion involved with it, so it will remain a place were people can still be valuable workers.
o Energy revolutions built around spreading both fracking and nuclear technologies. Cheap energy lets us get things done faster, better and cheaper. The constant media chatter about gasoline prices shows that we are quite aware of this concept. But because it is the object of a lot of emotion a lot of mythology is also wrapped around the topic. The current fracking controversies are an example of that. And the stark terror of nuclear has stopped us from exploiting the nuclear NBT opportunity for more than half a century now.
o An employment revolution made possible by dramatically simplifying employment regulations. Employment suffers deeply from The Curse of Being Important, and the suffering seems to be increasing with each decade. Way, way too many people have a say in how a job is conducted! Simplifying the employer-employee relation will be a huge step in allowing the NBT's to be discovered and exploited.
o A genetics revolution?
o A smart phone revolution?
The next boom hasn't happened yet. Why?
There are barriers which much be overcome. Here is my list:
o Recognize and remove The Curse of Being Important. As mentioned above one of the big barriers is the complex employer-employee relation that every business has to deal with these days.
o Recognize that growth is important. As I like to put it, "Fairness is nice, growth is necessary." Communities get distracted. Community leaders tend to confuse spectacle with growth so they promote spectacle, and we get "bread and circus" style choices rather than NBT promoting choices. When the community leaders are picking winners rather than letting the marketplace pick winners, the community leaders are doing it wrong. We as communities need to focus again and do what it takes to promote growth. We need to recognize that laissez-faire simplicty, and the transparent, level, legal playing field are often the best NBT growth promoters.
o Recognize that NBT growth is a messy process. Finding and exploiting NBT's involves lots of experimenting, and experimenting involves lots of failures and learning from failures. Again, this is disruptive and scary. It is not tidy and orderly. The community needs to train itself to believe that -- hopeless, messy, and useless as it may seem at the beginning -- this roller coaster ride will have an excitingly good ending.
o We have to figure out what to do with people. With more automation sure to be part of the coming NBT's we need to figure out what people will do that maintains their dignity and commitment to the system -- their enfranchisement. If we don't we will create a spectacular neo-bread-and-circus lifestyle that would make even Nero blush. This is not likely to be what any of us want, and it will crash.
Our economic growth will fire up again when we discover our next generation of NBT's and permit their rapid exploitation. These new NBT's are very likely to be heavy industries which means that lots of disruption will accompany their implementation. We should once again expect a boom which leads us down an exciting, rough, and surprising road. But the other end will be just as dazzling as our 20th century progress has been.
Update: This 8 Aug 13 Economist article, Technology and our standard of living: Are we really better off than the numbers show?, is also making the point that this last boom has been different than previous ones and less disruptive.
Update: This 17 Aug 13 Economist article, Net Gains and Losses, talks about how "The internet has not yet produced the hoped-for productivity miracle".
Update: This 8 Sep 13 WSJ article, America Faces the Shock of the Old Future Economic Growth May Depend on Innovation by Justin Lahart, is another one fretting about the decline in productivity growth over the last couple of decades. From the article, "[Robert Gordon] argues that even with the boost provided by personal computers and the Web in the late 1990s through the early part of the last decade, innovation since the 1970s hasn't been as strong as in earlier decades when products like the internal combustion engine filtered through the economy."
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