Why The Increasing Pace of Innovation and Disruption Matters To Your Life and Retirement

Impacts to your income, your assets, your pension safety, your longevity are just a few reasons that the exponential advances in technology need to be part of your thinking and planning.

There are real advantages to becoming aware of the advancing technologies both to avoid or minimize their possible negative impacts, but also to use them to better your life and the lives of others.

One of the first steps is to read/watch/learn enough to become confident that dramatic changes are coming so you can take the lead in adapting to these changes and using them rather than having the changes happen to you.

“Exponential improvement in core digital technologies is fueling exponential innovation” reads the first line of an Executive Summary of a recent report from Deloitte’s “Big Shift” analysis called “From Exponential Technologies To Exponential Innovation”. (see link to full report at bottom) The three core technologies they refer to are;

1. Computing Power (cost-performance)

2. Storage (data storage cost-performance)

3. Bandwidth (internet megabits per second)

These three have been expanding at an exponential rate (i.e. 1, 2, 4, 8, 16, 32) for decades. These advances allow innovations to be built on top of these advances. Further the innovations start cross-pollinating causing future advances, innovation and disruption.

The intended audience of the report is US executives, but the insights are relevant to everyone. One particular aspect they mention is the increased “topple rate – the rate at which companies switch leadership positions in a sector – has increased 39%” since the advent of the microchip. The explanation offered is that people and organizations have a very hard time thinking and planning in a world of exponential change. The resulting instability is what I labelled “creative-destructive” influences from technological advance.

As we see continued acceleration, we should expect increased “creative-destructive” disruption. This can directly impact our investments, our current or future job prospects, as well as the ability of companies to fund their pension plans.

Another insight in this report is drawing attention to the cross-pollination of innovation from different domains of human endeavour – say nanotechnology and medicine (or art!). The future impacts can be missed because of a;

“…focus on advances in the individual technologies but tend to miss a deeper and more powerful development: the increasing ability of these technologies to amplify the performance of each other in unexpected ways that disrupt traditional boundaries. We cannot grasp the full potential of exponential technologies until we explore the interactions across them.”     on page 3

All in all, this is an excellent report that shows how more mainstream business is only just becoming aware of dramatic changes ahead. I think of this as if we are surfing and we have the choice of catching the wave, or being swamped by the churning waters.  Time to start paddling!

Michael

Here is the download link for the report;

http://dupress.com/articles/from-exponential-technologies-to-exponential-innovation/?id=gx%3Asm%3Atw%3Adup401%3Aawa%3Atmt%3A101713%3Adeloitte