Rome Club Report 2018, Chapter 1.11: “Disruptive Technologies and the Digital Revolution”

Picture. 1.16 Innovative technologies may begin with inferior quality of use or standards, but ultimately outperform even the most demanding standards because of their dynamics in creating or conquering new markets.

1.11.1 Disruptive Technologies: A New Rush

Technological innovation and development are accelerating. In America, innovation is what everyone almost aspires to. However, the new term, causing real excitement - "subversive technology." This means innovations that replace and destroy existing technology, for example, smartphones that replace traditional photography (Kodak, once a high-yield company, went bankrupt a few years later; or streaming music that replaces CD recordings). The term was coined by Clayton Christensen and published in 1995 by Bauer and Christensen. The concept is visualized in Figure 1.16.

Until 1995, the meaning of “destructive” was negative. Do you like being “blown up” while you are sleeping, making love or enjoying dinner with friends? For most readers, probably not. But for fans of innovation, this is real excitement. The authors of disruptive technologies refer to the concept of the creative destruction of Joseph Schumpeter.

In 1942, Schumpeter shocked his readers, giving the destruction a positive meaning: “good” innovations outperform and thereby destroy old structures and technologies. He called it the "essential fact of capitalism." Despite the origins of Schumpeter, Bower and Christensen, naturally, did not want to call their brainchild destructive technology. Conveniently, the adjective disruptive was still available with a not too large negative value. But in this chapter we cannot avoid - with all our admiration for inventive and successful technological innovations - the consideration also of the dark sides of destruction and destruction.

1.11.2 Digitization - “hit of the season”

Today, there is a tremendous acceleration of technological innovation. Digitalization is the buzzword of our time. Young people see themselves as “digital natives” and look a bit down on “digital immigrants”, elderly people who grew up with books, pens and paper. The behavior of digital natives continues to change rapidly, in accordance with thousands of new applications every year, and indeed with the digitization of our society.

And they usually enjoy the shock they experience.

People devote much of their time, attention and resources to digital artifacts. Although there are many other areas where technologies are developing, digital technologies have become something of a synonym for “technology” and a dominant part of the public sphere.

Technological innovations accelerate and introduce new products and services, change processes, shake markets and ultimately change our lives, causing transformations that are considered “destructive” - using the positive meaning of this term.

Since the 1980s, there has been an explosive growth in information and communication technologies (ICT), and their presence has become ubiquitous. The pervasive madness triggered by the latest digital gadget reflects the breathtaking entrepreneurial spirit that is mobilized by the potential of technology to satisfy human desires. However, in parallel with the ICT explosion, humankind has become better aware of the many and interrelated problems that it faces in order to make life on this planet pleasant and sustainable in the long term.

In 1987, the Brundtland Commission popularized the concept of "sustainable development" (UR) almost simultaneously with the launch of the first personal computers (IBM PC in 1981, Commodore 64 in 1982 and Macintosh in 1984). In the meantime, the significant negative effects of the digital revolution, both social and environmental, have become apparent.

The size and speed of digital transformation is unprecedented. In order to respond to it and live with it, all kinds of human potential will be required. The best and brightest researchers and innovators should be involved in problem solving. Some might explore how to best use digital technology to overcome the shortcomings of our unsustainable lifestyle.

What's next? It is unclear whether the “blue oceans”, that is, the undisputed market advantage between companies providing new services, will continue to open, as it has been for decades in the IT world. At the same time, new adversaries try to create their own “blue oceans” more often, using digital technologies to circumvent current rules, labor agreements and fiscal systems. Under the slogan of “zero marginal cost,” they mainly seek to evade paying taxes. Taxi drivers paying taxes are not Uber property, which allows to avoid full transport costs and minimize tax payments when creating a new monopoly brand. The concept of a “sharing economy” is certainly attractive, but it needs an appropriate structure to ensure that

One of the most discussed trends of the day is 3D printing, which is positioned as a means of empowering citizens. It is assumed that it will bring to any of us the ability to independently produce at home, with easy access to new environmentally friendly projects, inspired by nature and requiring less energy and raw materials, with improved strength, weight and efficiency. 3D printing is impressive, but it still has to pass a reality test from an economic, social and environmental point of view. Imagine only the supply of raw materials. If millions of decentralized 3D printers require a stable supply of 20 to 60 different chemical elements (and more compounds), one would expect a sharp increase in demand for these chemicals and their mass distribution. And the processing of chemical elements

1.11.3 Horror stories: Singularity and Exponential Technologies

Jeremy Rifkin is one of the first proponents of the new economy - according to him, the Third Industrial Revolution - which will emerge from a set of new and destructive technologies supported by ICT. His vision may be a bit narrow, mainly focused on renewable energy and its decentralization. In fact, the new industrial revolution goes far beyond that.

In fact, the “third” industrial revolution of Rifkin is closely related to what is currently called the fourth industrial revolution, commonly called Industry 4.0. This chapter focuses on the more frightening side of this revolution. Focus on the positive aspects in ch. 3

From a technical point of view, two main factors underlie the digitization process. Moore’s first law (named after the founder of Intel), which has been in effect for more than 40 years and states that technical progress in miniaturization allows you to roughly double the number of transistors in a dense integrated circuit every 2 years. This allowed the computational power of microprocessors to increase extremely quickly, without increasing their cost.

The second driver is Metcalf's law, which states that the usefulness of the network is proportional to the square of the number of users of this network. This means that the process of competitive diffusion across the network can be very fast, because the advantage of the leading player is more than linear; it is quadratic. Software companies, telecommunications and the Internet show such strong positive feedback to the network.

These observable characteristics are currently being used as the basis for a new belief in "exponential technology." The consequence of this, apparently, is “exponential innovation” as a process capable of disrupting all areas of human practice in our interests. Ray Kurzweil and Peter Diamandis are the most famous propagandists of this vision of endless improvements, which they interpret as a path to a new world of abundance, in which all the needs of the future ten billion people around the world will be met by using new and exciting water purification technologies, food production, solar energy; medicine; the formation and reuse or recycling of rare minerals. In sharp contrast to the mainly “linearly-minded leaders” of large corporations around the world, it is expected

Here is one of the scariest moments. Peter Diamandis and Stephen Kotler do not seem to be familiar with the “rebound effect,” which essentially indicates that in the past, all the improvements in efficiency created a higher availability of desired products, which invariably led to higher consumption and, as a result, environmental damage, such as global warming, depletion of resources and loss of biodiversity (often caused by increased human transport).

And there are social consequences. One of them turned into a novel. Dave Eggers at The Circle shows how the powers of the world's largest Internet company can become overwhelming. Situations resemble George Orwell's 1984, if in a funny language and closer to today's reality. No matter how outlandish these fears may seem now, one should not be naive. The digital world, like other parts of the business community, contributes to the emergence of monopolies, including gangster conglomerates.

What is even worse is Ray Kurzweil’s “singularity” vision, when “artificial intelligence” surpasses man, and from that moment on, the accelerated speed of “innovation” occurs. Readers are invited to think about how to manage the dynamics of self-accelerating innovations created by supercomputers. The genie will remain in the bottle. And then combine this uncontrollability with the prospects of modern high-tech weapons, hysterical or misinformed leaders and the lack of knowledge of the laws of physics by people.

Another consideration is the excitement of exponential technologies cultivated at Singularity University in Sunnyvale, California. Peter Diamandis serves as president of this high-tech think tank that supports the idea of ​​continuous, exponential growth in technology and innovation.

Good science proves that exponential phenomena associated with resources are only viable for a limited period of time. In the case of closed systems, such as bacteria on a Petri dish, an exponential “logarithmic phase” occurs after a slow “lag phase”, followed by a stationary phase. And this, as a rule, leads to the "phase of death", because bacteria exhaust their own resource base.

There are, of course, differences between biology and electronics, but in stark contrast to the arrogant optimism of seeing singularities, the industry-sponsored international Technological Road Map for Semiconductors (ITRS) now recognizes that Moore’s law will not last forever, that its dynamics will change radically around 2020 or 2025 due to physical limitations and the problem of controlling heat emissions at the microscopic level. Therefore, the miniaturization of transistors seems close to its end. Perhaps, in the end, our civilization should be more modest in terms of the prospects for exponential innovation.

With all the positive aspects related to ICT and digital technologies, when considering their direct impact from the point of view of sustainability, there is no doubt that the effect of the first order is negative. The ICT sector itself has led to a rapid, in many cases exponential, increase in the use of energy, water and some critical resources, such as special metals. This is not the place to go into details, but the evidence is piling up and have many different faces. Readers may find some references in the message.

1.11.4 Jobs

One of the biggest problems associated with disruptive digital innovation is related to the elimination of jobs. Politically, it is extremely sensitive. In fact, new digital businesses dream of replacing employees with robots. Thus, the danger of a general disappearance of jobs is obvious, an issue that has been widely discussed for several years. A frequently cited study by Carl Benedict Frey and Michael Osborne shows that 47% of jobs (in the United States) are at risk of automation, as shown in the figure. 1.17.120 The World Economic Forum report112 for 2016 concludes that over the next 5 years about 7.1 million jobs will be lost and 2 million jobs created in 15 important countries with a net loss effect of 5.1 million work places. Newly industrialized countries with an underdeveloped technological infrastructure are likely to suffer more than some old and rich industrialized countries. Vulnerable are also industries that produce parts for large manufacturers located in rich countries.

More dramatic numbers can be found in many places. I will quote only one thing: a recent announcement says that “by 2020, the world economy will face a deficit of 85 million skilled jobs.” The advertising, sponsored by Chevron and the 49ERS Foundation, continues the strategy of educational tools, which says “in the next decade, 80% of all professions are expected to require STEM skills (science, technology, engineering and mathematics)”.

Of course, the reduction and disappearance of traditional jobs - due to automated production and other types of digitization - should be the impetus for the creation of new jobs associated with education and care, and especially with the activities necessary for the mass transition to sustainability. However, such jobs traditionally depend mainly on public sector initiatives and public sector financing. How does this happen in the economic system, where tax increases seem not a starter?

To the concerns related to work, the fact that the violation of digital technology also means a deterioration in labor relations, de-union and based on cheap labor, with the exception of a rather small elite of techies, is added.



Picture. 1.17 The likelihood of loss of jobs as a result of computerization or digitalization. Forty-seven percent of (US) jobs have more than 70% loss probability (source: Frey CB, Osborne MA (2016) The future of employment: how susceptible are jobs to computerization? Www.sciencedirect.com/science/article/pii/S0040162516302244 )

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Thanks for the translation thanks to Jonas Stankevichus. If you are interested, I invite you to join the "flashmob" to translate a 220-page report. Write in a personal or email magisterludi2016@yandex.ru

More translations of the report of the Club of Rome 2018

Preface

Chapter 1.1.1 “Various types of crises and feelings of helplessness”
Chapter 1.1.2: “Financing”
Chapter 1.1.3: “An Empty World Against Full Peace”

Chapter 2.6: “Philosophical Market Doctrine Errors”

Chapter 3.1: “Regenerative Economics”
Chapter 3.2 : “Development Alternatives”
Chapter 3.3: “Blue Economy”
Chapter 3.4: “Decentralized Energy”
Chapter 3.5: “Some Success Stories in Agriculture”
Chapter 3.6: “Regenerative Urbanism: Ecopolis”
Chapter 3.7: “Climate: Good News, but Big problems "
Chapter 3.8:" The economy of a closed cycle requires a different logic "
Gla Va 3.9: “Fivefold Resource Performance”
Chapter 3.10: “Bit Tax”
Chapter 3.11: “Financial Sector Reforms”
Chapter 3.12: “Economic System Reforms”
Chapter 3.13: “Philanthropy, Investment, Crowdsors and the Blockchain”
Chapter 3.14: “Not a single GDP ...”
Chapter 3.15: “Collective Leadership”
Chapter 3.16: “ Global Government "
Chapter 3.17:" Actions at the National Level: China and Bhutan "
Chapter 3.18:" Literacy for the Future "

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