20th
century saw massive pace of technological advances – radio, internet,
antibiotics, airplanes, space explorations, automobiles, nuclear power and many
more. The pace and global reach of these changes was unprecedented in human history.
But what we are seeing now is a tremendous gush of creativity we have seen in
the last decade. Let me illustrate a few (source Wikipedia):
- Apple Inc. is an American multinational corporation headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, online services, and personal computers;
- Facebook (formerly [thefacebook]) is an online social networking service headquartered in Menlo Park, California. Its website was launched on February 4, 2004;
- Uber, founded in 2009, is an app-based transportation network and taxi company headquartered in San Francisco, California, which operates in cities in many countries;
- Airbnb is a website for people to rent out lodging founded in August 2008. It has over 800,000 listings in 33,000 cities and 192 countries.
These are some of the most highly
valued companies created in relatively short periods of time (Apple changed
gear only in 2007). But note one important aspect; these companies haven’t done
‘new-new’ they have through creativity re-arranged the deck chairs. We had laptops,
emails / cellphones, cabs and hotels before these companies came on the scene.
This age is likely to continue and for the
following reasons:
- Maturing of internet: The internet originated in 1960s as part of the US Government funded communication channel to survive traditional telecom networks during war times. While academia used it since 1980s but not until 1990s it was commercialized. We have over the last decade seen massive surge in penetration through cable and telecom companies across the globe aided but the development of support infrastructure from internet marketing and last-mile delivery;
- Availability of capital: Globally, as I have discussed in my previous articles there has been a massive decline in aggregate demand since the global financial crises. This in turn has resulted in a global savings glut. High risk ventures are started due to fertile grounds created by capital availability and survive because of innovative agile teams supported by massive dosage of capital (which itself has become more organized with angels, VC etc) to force through a change in pace of adoption;
- Decline in population and population growth in developed markets: In an agricultural society children are productive at a very young age (even 6-7 years) and in an urban society they start becoming productive at 3 times that age and before that they are massive consumers. Consequently, growth has slowed and entrepreneurs and risk capital have focused their energy on re-organizing existing markets.
This is not to suggest I am
depressed about new inventions and but is just a phase that the overall
environment imposes. In 2014, according to projections by Battelle, science and
technology development group, the world will spend about $1.6tn on research and
development in a range of engineering-related disciplines from robotics to
social media. As the world, sees pressure from aspects like environment,
resource constraints or populations decline constraining delivery of basic
services and creating wage inflation, human adaptability will resolve the same.
Richard Lipsey, emeritus professor of
economics at Simon Fraser University in Canada, and an authority on technology
trends, is bullish. He points to a list of current changes, “We are now seeing
artificial limbs that respond to brain impulses as if they were part of
people’s own bodies; the continuing transformation of personal interactions,
revolutions and politics through social media. Then, there is the fact that we
are probably the last generation of people who will die with only the genetic
characteristics that they inherited from their parents [and] the end of the
two-century-long age of fossil fuels, as they are replaced by solar, geothermal
and wind power. We have the promise of a nanotechnology revolution that will
transform virtually everything that we use; and the ability to learn through
scanning technology more about how the brain functions than could have ever
have been dreamt of by Sigmund Freud.”
So while tempo of global invention and
innovation change more dramatically, there are other things like geopolitics
where basic characters of nations change glacially. I have written multiple
times about Russian thought process in my articles:
- In March 2014 - The Russians control 11.5% of global landmass with the ninth largest population in the world. It has borders with over 16 independent countries including US, Japan and China. It has limited natural boundaries protecting the Russian core (Moscow region) except buffer states like Ukraine or ‘caucus’ countries like Georgia or buffer regions like Siberia. Given the diverse population in such far flung areas, it manages to keep relative calm. It is fundamentally an ‘unstable’ kept in some form of stability by strategy including coercive force of energy or military. It would take great skill and heft to manage such a situation;
- In October 2014 - When the USSR disintegrated, Ukraine, US, UK and Russia entered into a treaty in 1994 whereby Ukraine would give up the nuclear weapons in exchange for ‘independence and sovereignty of the borders’. But when the Crimean crises and its aftermath came there were no guarantors for the borders. Given Ukrainian importance to the Russians (Odessa is the largest warm water port, gas pipeline infrastructure, food security and geopolitical space) this situation were to come the moment West tried to wean Ukraine away from Russia. Russia would exert its full might to ensure Ukraine stayed. US and UK understand not only the importance of Ukraine but also their inability to exert meaningful pressure on the Russians, despite the economic sanctions. Therefore, the situation continues. It will take a while to resolve till Russian core interest are agreed to be protected.
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