Monday, February 20, 2006

Disruptive Innovations and Technologies

There is a fascinating discussion taking place on a particular list, which prompts the following thoughts:

Every new technology is disruptive, though some new technologies are more disruptive than others

The degree to which any particular technology is disruptive depends not only on its inherent disruptiveness (technologically and socially) but also on the degree to which it is allowed to develop its own momentum in the marketplace

Today, the technologies that are being released into society are more and more disruptive – e.g. in nano, bio, info, and robotics.

The world is divided between those who are blithely ignorant about the potential impact of these technologies, and those who are aware of it.

Those who are aware are divided between unfettered market-believers who think that all new technologies are eventually beneficial even if temporarily disruptive, and market-skeptics who think that technology-induced disruptions are not always beneficial, or might need to have their disruptiveness moderated for a while in order to have a better balance of disadvantage and benefit.

Market-skeptics are further divided between those who are principally concerned for the welfare of society as a whole, and those who are simply trying to protect vested interests – though it may be difficult to distinguish between these two groups.

For a variety of reasons, market-believers tend to focus on the upside and underplay the downside; conversely, also for a variety of reasons, market-skeptics tend to focus on the down-side and underplay the upside.

Generally, the principal and undisputed beneficiaries from the introduction of any technology tend to be the owners of that technology, though some benefit (nowadays less and less) goes to employees, suppliers and customers.

Society benefits in terms of increased "wealth-creation" but suffers in terms of the disruptive effect of the new technology. Till recently, the social benefit was large: technology tended to enlarge the middle class, principally because of new employment opportunities. But, nowadays, technology (combined with financial and other economic and political factors) is doing the opposite: technological advances are reducing the size of the middle class in Europe, America and other developed countries.

The result (well documented by any number of economists in any number of developed countries) is that the decreasing middle class is tending to splinter into a smaller fraction becoming richer and a larger fraction becoming poorer. This trend towards the decline of the middle class is offset by two developments:
(a) an increase in the size of the middle-class in "currently successful" countries such as China and India; and,
(b) greater mobility across classes, upwards as barriers to entry are lowered and new opportunities are presented by technological disruption in society, and downwards, because investment is not without its risks and hardly anyone understands the financial world as it is now (even the Fed has admitted that it does not understand all that is going on in the US, let alone the global, economy).

However, due to continued technological advances, the size of the middle classes in "currently successful" countries such as China and India is also going to decline (even without taking demographic factors into account).

Increasing social instability is therefore evident both in the developing and in the developed worlds.

It is easy to see why technologists and entrepreneurs are market-believers, and call for faster introduction of innovative (and disruptive) technology.

It is also clear why those who are not technologists, and those who are entrepreneurial and innovative in other areas than technology, wish to question whether further disruption of society is necessarily a good thing right now, or whether the introduction of socially-disruptive technologies might not usefully be slowed: if there is such a thing as a metabolic rate in society, is it possible that the metabolic rate was possibly too slow for the period preceding say the nineteenth century, but is becoming too fast in the twenty-first century?

When I raise points such as the above, market-believers tend to say "Nothing can stop the onward march of technology!".

However, they forget that money is what enables technological innovation to take place. Starve certain kinds of science/technology of money and that sort of science/tech tends to slow down. Improve the input of money into a particular area of science/technology, and the development of that kind of science/technology tends to speed up.

The question therefore is WHAT KIND OF TECHNOLOGICAL INNOVATIONS DOES GLOBAL SOCIETY MOST NEED AT PRESENT? Certainly we most need technologies that reduce our consumption of fossil fuels such as oil and gas, technologies that enable the environment to be healthier, technologies that improve family life, technologies that enhance the quality of life of the poorest and most disadvantaged. Regrettably, in spite of the self-serving publicity given to financing of technologies for these purposes, the proportion of money spent on these is actually declining. Compare, for example the amount of money spent on research into drugs for the diseases of the rich versus the amount of money spent on diseases for the poor.

ENDS Sphere: Related Content

1 comment:

Unknown said...

Dear Kendall

As far as I can see these are excellent ideas.

What I am not clear about is the extent to which you have already operationalised these ideas.

Do let me have your e-mail and we can carry on this discussion off-line

Best wishes

Prabhu Guptara