My latest Mind and Matter column in the Wall Street Journal is
on dematerialisation:
Economic growth is a form of deflation. If the cost of, say,
computing power goes down, then the users of computing power
acquire more of it for less-and thus attain a higher standard of
living. One thing that makes such deflation possible is
dematerialization, the reduction in the quantity of stuff needed to
produce a product. An iPhone, for example, weighs 1/100th and costs
1/10th as much as an Osborne Executive computer did in 1982, but it
has 150 times the processing speed and 100,000 times the
memory.
Dematerialization is occurring with all sorts of products. Banking
has shrunk to a handful of electrons moving on a cellphone, as have
maps, encyclopedias, cameras, books, card games, music, records and
letters-none of which now need to occupy physical space of their
own. And it's happening to food, too. In recent decades, wheat
straw has shrunk as grain production has grown, because breeders
have persuaded the plant to devote more of its energy to making the
thing that we value most. Future dematerialization includes the
possibility of synthetic meat-produced in a lab without brains,
legs or guts.
Dematerialization is one of the reasons that Peter Diamandis and
Steven Kotler give for the future's being "better than you think"
in their new book, "Abundance." Mr. Diamandis founded the X Prizes,
which handsomely reward those who reach certain far-minded goals in
technology, medicine, energy and ecology. The first X Prize was the
$10 million Ansari X Prize, won by Burt Rutan and Paul Allen in
2004 for sending a spacecraft capable of carrying three people 62
miles into space twice within two weeks. A current X Prize will
give $10 million to the "first team to sequence 100 human genomes
within 10 days for $10,000 or less per genome with an accuracy of
no more than one error in every 100,000 bases sequenced."
As these examples demonstrate, Messrs. Diamandis and Kotler think
that individual innovators can and will make huge differences to
human living standards. Many of their book's fascinating examples
are drawn from the world of business. Take Iqbal Quadir, who quit
his job as a venture capitalist in New York to start a cellphone
company in his native Bangladesh, at a time when cellphones cost
nearly twice the annual income of the average Bangladeshi. He had
the foresight to bet on falling costs and the usefulness of the new
technology for the long-isolated rural poor.
Prizes can reward such unexpected developments, whereas all too
much funding of research and development merely perpetuates the
predictable. Of course, the effect is slightly spoiled if the
prize-giver refuses to recognize an unorthodox solution to the
problem. This happened with Britain's famous Longitude Prize of the
18th century, the committee for which notoriously refused for
decades to recognize that John Harrison had solved the problem of
calculating longitude simply by using a reliable clock.
As well as the X Prizes, Mr. Diamandis is co-founder and chairman
of Singularity University, where the futurist Ray Kurzweil's ideas
of exponentially accelerating technology are explored. Despite
being unusually optimistic myself about what lies ahead for
humanity, I'm not yet convinced that we are about to see almost
infinite rates of technological improvement-Mr. Kurzweil's
singularity-resulting, for example, in the indefinite extension of
life.
No matter how many prizes we offer, certain growing problems-such
as caring for children and the elderly, or policing, or repairing
freeways-won't experience much dematerialization or deflation. And
as dematerialized goods and services like communication get
cheaper, these problems will increasingly dominate budgets, damping
the acceleration. So the future may be bright, but not dazzlingly
so.
