Why this is the era of crossroads for technology

When digital became the New Normal, a silo that used to be the safe dwelling place of nerds and geeks all over the world suddenly opened up to the mainstream...

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February 4, 2020

Technology meets economy

The most obvious crossroad is the one where Economy meets Technology. Sector by sector we are witnessing the impact of digital, the Internet and other Day After Tomorrow technologies on every single aspect of business. Technology used to be a mechanism for ‘optimizing’ an industry, but now it is fundamentally reshaping entire industries and markets.

Back in 2011, Marc Andreessen described this transition beautifully in his famous Wall Street Journal op-ed “Software is eating the world”. As the founder of the brilliant but tragic Netscape, he became the poster-child of the first Internet bubble, who then reinvented himself as one of the most influential financiers in Silicon Valley. What he wrote back then in his op-ed, still stands strong: “Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries can be widely delivered at global scale.” This transition is now happening at full speed. Amazon has transformed retail with software, Netflix has transformed television with software, and Uber has transformed transportation with software.

And we’re just getting started.

When I was in my twenties, the brilliant ‘Being Digital’ by Nicholas Negroponte was one of the most influential books around. He was the founder of the MIT Media Lab, a forward-thinking interdisciplinary research lab at the Massachusetts Institute of Technology that encourages the unconventional mixing and matching of seemingly disparate research areas: from technology, to media, science, art and design.

Negroponte’s book describes two types of companies: there are the ‘bits’ companies and the ‘atoms’ companies. ‘Bits’ companies deal with bits and bytes, data, information, ones and zeros. Banks are typically bits companies, since they essentially only deal with the information about the accounts of customers. Equally, insurance companies are ‘bits’ companies. Companies that haul cement from A to B are obviously ‘atoms’ companies as they physically move ‘real’ stuff around. Negroponte fundamentally believed that, in the end, every atom related business would come to be ruled by ‘bits’.

And it seems that he was right. Take mobility: Uber is doing a pretty good job of transforming an ‘atoms’ business of physical cars into a ‘bits’ business of mobile platforms, APIs and Big Data. Uber does not own any cars. In fact, it doesn’t own any of the ‘atoms’ that are part of its service. Yet, it has built incredible value in a very short period of time by ‘orchestrating’ the flow of bits in such a way that you can hail a ride from its mobile app. Uber was founded in March of 2009, and just 10 years later, it was floated on the New York Stock Exchange with a market capitalization of more than $70 billion.

Andreessen’s ‘software is eating the world’ thesis was spot on in predicting what is unfolding in front of our very eyes. Information has become the core fuel of global platforms, some of which then turn into dominant ‘category kings’, that seem invincible.

Today, we’re experiencing a backlash against this category king phenomenon. Platforms such as Facebook and Google are under increased scrutiny over the power they yield, the vast and deep knowledge they have amassed, and their consequent influence over consumers. As I stated earlier, we’ve gone a long way since thinking “Yeay, the Internet is going to cut out all middlemen from our transactions and the traditional media will no longer be able to control our sense of reality. We’re free!”

Not so much. Twenty years later we’re having some serious second thoughts about this evolution. Amazon grew out to be the most monstrous middleman we could have ever imagined: it knows exactly how to play us as consumers, and massively uses its economy of scale to pressure suppliers. Middlemen are back with a vengeance. Some of us even cherish nostalgic feelings of sympathy for the – in retrospect – limited influence of the ‘old’ media when we compare it to the highly manipulative power of a platform like Facebook. Not so long ago, a science fiction story where Russia influenced a Big Data company like Cambridge Analytica to leverage a global platform like Facebook to alter the outcome of the US Presidential elections would have seen absurdly far-fetched.

But reality is much stranger than fiction nowadays.

Technology meets politics

We are at a crossroads. It’s not just technology changing the economy. It’s influencing geopolitics as well. The escalation of a new ‘Cold War’ between China and the US could have a profound impact on how the power balance of our planet develops.

I grew up in Europe during the ‘old’ Cold War. In the aftermath of the Second World War, Russia and the US were arm-wrestling for global domination. The stakes were high and driven by two vital technologies: nuclear and space. At first, the Russians seemed to be ahead of the game, continuously proving their technological and scientific superiority. The high point of their success was of course the seminal launch of the Sputnik satellite into an elliptical low Earth orbit on October 4th, 1957. That’s when the Americans started to panic. They were truly and utterly flabbergasted that Russia had been able to launch the very first artificial satellite around the earth. Every American could turn on their radio and hear the (to them) ominous beep of the Russian Sputnik as it flew over US territory. That Russian beep was all it took to jolt the US into swift action.

Two very concrete measures of this panic-induced action plan are still extremely visible today. The first was the creation of DARPA, the ‘Defense Advanced Research Projects Agency’. It received an almost unlimited budget to create ‘breakthrough technologies for national security’ and eventually helped the US win the Space Race. But it did a lot more than that. The Internet as we know it was a DARPA project, the Global Positioning System that guides our car navigation and Google Maps was a DARPA project, and even the Google Driverless Car was originally a DARPA project. It also allowed Silicon Valley to bloom into the global Mecca of technological innovation that it is today. In short, DARPA gave us the world of the New Normal.

The second swift action from the US Government after the humiliating Sputnik incident was the creation of the National Defense Education Act of 1958. The US realized that they did not have the scientific brainpower to battle the Soviets, or win the Cold War. So they initiated a dramatic increase in spending on education in science, math and foreign languages to build the right skillsets for the future. The result was that in the US, the percentage of people who transitioned from high-school to college would jump from 15% in 1940 to more than 40% by 1970.

It was exactly this massive spending and focus on technology, innovation and education that helped the US win the Cold War. There’s a pretty good chance that we’ll soon experience a remake of that movie, but with different actors: China and the US. The battlefields, too, have evolved. The new Cold War between the US and China has (mostly) moved away from nuclear and space technologies, and is instead played on cyber-security, artificial intelligence and the infrastructure for next generation networks, like 5G. The battlefields include robotics and automation, quantum computing, encryption, but also enormous advances in genetics and bioscience. This cold war is essentially a war on talent, with China producing almost 5 million STEM (Science, Technology, Engineering and Mathematics) graduates every year, while the US produces barely a tenth of that.

Technology meets biology

The geopolitical landscape of our world could be thoroughly reshaped by this new cold war. And yet, for me this isn’t even the most interesting of the current crossroads. We are now rapidly moving into a world where ‘disruption’ goes way beyond the realm of digital. Take biology, for example. In the final weeks of 2018, two very cute and very special twin babies were born in China: Lulu and Nana. They had (illegally) been genetically modified with CRISPR-Cas9, a technology that had only been created a few years earlier. The simplest way to describe CRISPR-Cas9 would be to say that it allows to ‘copy-and-paste’ genetic material to modify the genetics of an organism. It’s insane when you think about it: we only learned how to ‘read’ the full human genome back in 2001, and by 2018 we could already manipulate and ‘copy-and-paste’ genetic code. We are at the eve of our capability to start ‘writing’ genetic code. Soon, we’ll be able to play God.

Now this is where it gets exciting: this disruption will spread beyond the digital domains into all sorts of new territories. Look at agriculture, and food. In the last couple of years, billions of dollars of venture capital have flowed towards entrepreneurs eager to use disruptive technologies to transform the food chain, and introduce vegan-based alternatives into our ecologically unsound eating practices. They will fully disrupt how we feed ourselves on this planet. In my opinion, we are truly privileged to be a witness of such a massively transformational era. It must have been truly amazing to be part of the social or industrial revolution, but I’m sure our ancestors would have given up an arm or a leg to partake in the current shift. This is the era of disruption, the era of unbounded technological advancement, and it will completely transform our lives, our markets, and our society.

If you already thought that ‘Digital’ was impressive, brace yourselves, ‘cause you’re in for a helluva ride.

This article first appeared on Forbes.

Peter Hinssen
Peter Hinssen
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February 4, 2020