Sectors That Will Be Transformed By Technology in the Next Ten Years: The View from 1995
by Bill Reichert, Garage Technology Ventures
The tech world is constantly promising us an amazing future. “The pace of technological progress is accelerating!” What an extraordinary era we live in, we are told. We have the great good fortune to live in a time of “exponential” advances. The Internet, smart phones, AI, genomics, quantum computing!
But a battle is waging in the futurist community. While there have always been those who warned of the dangers of technology, futurism has generally been dominated by optimists. Increasingly, however, we hear pundits warning us that this technological progress could lead to a dystopian future, with industries obliterated by technological disruption, and jobs eliminated by computers and robots. Or worse: An Artificial Intelligence that is so much smarter than us that She will take over all our systems and enslave us. The new future dystopia won’t be Morlocks; it will be some advanced evil version of DeepMind.
How good are we, really, when it comes to predicting the future, whether utopian or dystopian?
While reading through various articles on the impact of technology on our future, I came across a mind-bending article dating back to 1995 from a now-defunct magazine. The title of the article was, “Sectors That Will Be Transformed by Technology in the Next Ten Years.”
Remember, this is 1995, over 20 years ago, at the dawn of the Internet. How good were we at predicting the future? Some excerpts …
“The pace of progress in the computer industry is dazzling. The impact of new technologies promises to transform dramatically the way we work and live. The emergence of the Internet and the rapid convergence of computers, multimedia, online commerce and digital communications will make our lives much better, but it will also hurt a lot of traditional businesses. Here are some of the most dramatic changes we can expect in the next ten years:
- Newspapers, magazines, books, journals will disappear: They will still be there, just in digital form. Already we are seeing publishers experimenting in the digital ecosphere with online versions of magazine and journal articles. By 2005, you can expect to be reading most of your news and books on your tablet computer. No more piles of unfinished reading on your night table, or in your bathroom! Some publishers will make the transition; some won’t. But one thing is clear: The paper industry will turn into sawdust!
- Retail will get further squeezed: The retail world has already been transformed by the rise of Walmart, Target, and the other “big box” stores. Traditional retailers will barely have a chance to catch their breath before they start getting squeezed by online shopping (also known as “e-commerce”). Already online entrepreneurs are selling books, CDs, electronics, groceries, and, of course, pizza. Some people prefer shopping in person and going to the mall (teenagers), but in today’s high-pressure, fast-moving world, the appeal of online shopping is obvious. By 2005, you will be able to get most things you need delivered to your door, and shopping malls will most likely be converted to distribution centers. The good news for manufacturers: As it becomes easier and easier to buy stuff, we will probably buy more!”
Well, it looks like they got this right, at least directionally, although the timing was off. The publishing and retail industries have certainly been rocked by the Internet. But I still have books and magazines cluttering up my house and my office, and Walmart has continued to grow, although even the leviathan of retail is running scared. The disruption has taken a lot longer than expected. Lots of people have lost jobs in media and retail, but has total employment in media and retail gone down? Jobs have been shifted by technology, not eliminated.
We were a little less accurate forecasting the next three sectors …
- “Telecommuting will transform the nature of work: Finally networking technology is reaching the level of performance needed to effectively telecommute. The cost of commuting is one of the biggest costs that workers and businesses bear. We will gain billions of hours of productivity once the new telecommuting technologies are in place. You will be able to see your co-workers directly across from you – on the screen. Even if they are actually on the other side of the world! By 2005, analysts predict that as many as 30% to 40% of jobs could be affected by telecommuting. But not everyone will win as a result … (See the next two affected sectors)
- Downtown real estate values will collapse: The good news is that you probably won’t have to endure those horrible rush hour traffic jams. The bad news is that all those big fancy buildings that provide office space for all those workers will no longer be necessary. Central urban real estate has been climbing rapidly in the last few years as the economy recovers, but once the Internet eliminates the need to be downtown, prices will tumble. With the emptying of downtown office buildings, so too will downtown restaurants, hotels, and all the other services that support central business districts wither away. All the people who go downtown to support all those office workers will no longer be needed. That will hurt them, but it will also further reduce traffic congestion. No need for all those parking lots! The good news is that smaller towns, with more affordable housing and more comfortable communities will see a renaissance as telecommuters move to where they want to live (and work).
- The auto, airline and oil industries will decline: With the advent of telecommuting and e-commerce, we won’t need all those cars to commute to work and drive to the mall. Meanwhile, the Japanese have demonstrated that cars don’t have to be traded in every three or four years. Cars will become appliances and will lose their status symbol role. If you are not driving around, who’s going to be impressed by your fancy BMW? At the same time, air travel will also drop, thanks to our ability to connect over the Internet to businesses around the world. Why would anyone fly across the country, or around the world, when you can just schedule a face-to-face video meeting? With the decline of the auto and airline industries, we will see the final collapse of OPEC. Demand for gasoline will drop, and the oil rich countries will no longer be important. We won’t have to worry about stabilizing the Middle East with expensive military interventions like the recent Iraq/Kuwait war. By 2005, the United States will once again become energy self-sufficient.”
Wow. Big miss on multiple fronts! We thought we would escape traffic jams by telecommuting. Now we are hoping to avoid the pain by driving around in our driverless autonomous car-pods.
On the optimistic side, we thought the Internet would transform, and dramatically improve, education and health, as well as improving our entertainment experience …
- “High quality education will be universally available: Once everyone connects to the Internet, then everyone will have access to the highest quality instruction available. Third graders can learn biology from Nobel Laureates, who will share their understanding via interactive multimedia courseware. An expert on every topic will be only a mouseclick away. Instead of having to be the “sage on the stage,” each teacher will become the “guide on the side,” working with students individually and in small groups as students explore topics online and demonstrate their mastery of subjects using computer-based assessments. Given the relentless drop in computing costs, by 2005, every student will have their own laptop computer and will be learning from a vast global curriculum of interactive video, audio, photos and text materials.
- High quality healthcare will be universally available: Five years ago, the U.S. government launched the Human Genome Project, with the goal of sequencing the entire human genome and uncovering the secrets hidden in our DNA. Soon we will be able to develop drugs based on your individual genetic make-up, and the genetic profile of the disease that afflicts you. Meanwhile, as Moore’s Law drives down the cost of medical equipment, in ten years the cost of an MRI will be one-tenth the cost today. It will be easy and cheap to see what’s wrong inside your body, and then address it with a drug tailored specifically for you. No one will be limited by the knowledge and skills of their local doctor, assuming they even have a local doctor. Doctors from around the world, along with computerized knowledge bases of all the world’s medical information, will be available over the Internet. We might even be able to figure out how and why the human body ages, and even reverse the process. Imagine, your mother looking the same age as your daughter!
- Network television will vanish, and so will cable: We’ve already seen network television get severely hurt by cable. Everyone in television, and in movies, sees that they need to figure out how to shift their models over to the new digital model. The new era online companies like AOL are showing the traditional media companies that people would much rather get their entertainment when they want it, and not have to wait until 8:00 pm on Sunday night. Last year, Time Warner launched their Full Service Network in Florida, allowing subscribers to get their entertainment “on demand.” By 2005, we will no longer be scanning through multiple channels to see what is on. We’ll decide what we want to see, and download it to our new online home entertainment systems.
Over the next ten years, we will see dramatic changes in our work, our entertainment, our shopping, our schools – pretty much everything across our daily lives. For some, this will be a wonderful new world. For some, however, this will be very painful ….”
Pretty amazing, right? I’m old enough to remember 1995, and it seemed like this was almost certainly going to happen. Maybe not by 2005, but certainly by 2010.
Okay, by now you’ve probably figured out that the “excerpt” above wasn’t from any specific “article” I uncovered. But every one of those memes about how different sectors of the economy were going to be affected by technology emerged in the 90s, if not earlier.
What actually happened? Well, as it turns out, the futurists were partially right, about the more trivial things. Yes, publishing, retail and media have undergone pretty dramatic changes. But even with the changes we’ve seen in those industries, most technology futurists in 1995 would be stunned by how little things have actually changed. And with regard to all the other predictions? Wow, we were way, way off. Whether optimistic or pessimistic, those who have predicted transformative change are consistently wrong.
In particular, what is amazing is how little the nature of work has changed in the last 20 to 30 years. We still commute to office buildings. We still take endless meetings. We still write memos, develop plans, call on customers, miss deadlines, get reviewed, send out resumes, interview in secret, drive home, and microwave dinner, or order out. Sure, the tools are different. We don’t use copiers and fax machines (much) anymore, and we have email and a bunch of “collaboration tools.” There is nothing “exponential” about the changes over the last two decades at a fundamental level.
It’s also amazing how little the basic structure of the developed world society has changed. The rural vs. urban vs. suburban distribution of modern societies has remained remarkably stable over the past 30 or 40 years. By comparison, in the 20 years after World War II, the U.S. saw dramatic shifts in rural, urban and suburban societies. Not so much, recently.
Why have we been so wrong about the future? And what does that mean for us today, in 2017? Contrary to the popular meme that progress is accelerating, the reality is that change has slowed down, at least at a macro level, in the developed world. It means that when you are listening to techno-optimists wax enthusiastic about the “exponential” pace of change, and all the amazing things that are going to happen in the next five, ten, or 20 years, don’t hold your breath. Most of it won’t happen nearly that fast, if it happens at all. Consider all the predictions of scientific and technological advancement over the past 20 or 30 years, and yet consider the state of healthcare, transportation, energy, construction, education, agriculture, manufacturing. Lots of amazing new tools, some significant improvements, but not much transformational progress.
Contrary to the futurist hype, the past was exponential, the present is linear.
Then why does it seem like so many things are changing so quickly? Because, at a micro level, they are. Your smartphone, your computer, your television, your car – all will be “obsolete” within a year. With the globalization of commerce, competition has certainly accelerated. More new products rise and fall faster than ever before. At the product level, change is exponential.
But will your job be obsolete? Maybe your specific job. That is certainly a risk. As new products rise and fall faster, so do companies, and so therefore do jobs. But will you lose your job to a computer or to a robot? Not likely. You are at much higher risk of losing your job to competitive forces than to technological forces.
The futurists who predict a jobless future have no economic models on their side. In the history of the world, technology has never reduced overall employment. They argue, “But this time it’s different.” Why is it different? “AI,” they say. But every computer scientist will tell you that AI is really just statistics. Data, math, algorithms. Yes, AI is improving, but will it replace doctors and lawyers? Sure, just like calculators and computers replaced accountants. (They haven’t.) Will truck drivers be at risk of losing their jobs? Well, sometime in the next ten years, a person who might have been asked to drive a truck in the past will be asked to provision a driverless truck instead.
Unfortunately, progress never happens as fast as we would like. We all want all the amazing new technologies that the futurists are promising us, but it will take time. We should not tremble in fear of a dystopian future created by scary new technologies. The fact is, the dystopia is here. It’s just not evenly distributed. We have an employment problem, we have a job skills problem, we have an education problem, we have a healthcare problem, we have an income distribution problem. Now. All the worries of dystopian prophets are here today. Let’s stop blaming technology.
We know where the responsibility lies. It lies with us. Technology will not fix these problems, nor will technology suddenly create new problems we haven’t already considered. As individuals, we need to learn how to take control of our futures. The old model of lifetime employment is long gone, and so we have to be prepared for frequent changes, to move from opportunity to opportunity. As a society, we need to reduce the sources of friction that limit our ability as individuals to acquire the skills we need and apply the skills we have to their highest potential. That gets back to the basics of access to education and healthcare, and improved ability to find and, if necessary, relocate to better employment. Innovations in technology have already shown that they can help with these issues, but real progress in these areas depends on public policy. When it comes to overall economic and social progress, people and politics trump technology.
What about those of us working inside the innovation ecosystem? Universities, corporations, researchers, entrepreneurs, investors? Our job is to compete and collaborate to come up with the innovations that will make a dent in each of the challenges we face at the individual level, at the social level, and at the global level. It is our job to re-ignite the pace of progress.
Can we make a difference? We’ll see. As Yogi Berra supposedly said, “It’s tough to make predictions, especially about the future.”
If you are looking for more resources on raising venture capital, you can find several guides online at Resources for Entrepreneurs on the Garage website.
If you have any questions about this article, or about Garage Technology Ventures, you can contact Bill Reichert, Managing Director of Garage Technology Ventures (email: reichert@garage.com).