Is An Economic Boom Coming?
Mark Mills makes the case for the "Roaring 2020's"
Ask horse riders in the late 1800’s what improvements they wanted, and most would have said…a faster horse.
They got cars instead.
This line from The Cloud Revolution author Mark Mills shows how we struggle to imagine a future different from our own experience. Well start imagining, because Mills thinks we are entering “The Roaring 2020’s” a boom that will radically change - and improve - our economic lives.
Sounds like hyperbole, but every forecast in Mills’ book is based on capabilities we already have that are now becoming commercially viable.
Why now? What makes our current moment unique? Mills says it’s because advances are happening simultaneously on three fronts – information, machines and materials. This convergence is unusual and he believes the resulting synergies will be transformational.
Information: AI’s “You’ve Got Mail” Moment
It’s embarrassing how excited we were when email first spread widely. Meg Ryan and Tom Hanks even starred in a movie called You’ve Got Mail, where Meg neglects her live-in partner in favor of waiting for Tom’s next email1.
Mills thinks were in the “You’ve Got Mail” stage of AI - naively amazed even though we’ve haven’t seen anything yet. However, our discussion on the Ideas Lab podcast led to an illustration of what’s possible.
AI uses massive data and computing power. Each year a few of my students miss project deadlines because the algorithms they’ve built take too long to train or use so much power that their computers crash. This problem gets exponentially worse when data sets are large and unstructured.
And now, with sensors and cameras collecting information on everything, we are creating exactly that - a virtually infinite amount of data. How do you filter all this information to get something that AI can use without long wait times or high energy consumption?
A solution is for AI to operate at “both ends”. On the data collection side a “self-aware AI filter” sifts through the data, tossing out what isn’t relevant. Another AI algorithm operates on the newly cleaned data, looking for relationships and learning from it. This new knowledge is fed back to the filter to improve data collection. Over time a virtuous cycle emerges where the amount of data collected, and the associated computing costs, both fall. Then, as costs fall, the process can be applied more widely.
Machines: A Model T Robot Is Coming
Robots are going to be doing a lot. They’ll be farming, fishing and even deep sea mining. They’ll vastly improve delivery efficiency, as drones shuttle packages from vehicles to doorsteps. These productivity gains will spread more widely as these robots are refined to work for more complex industrial applications.
They’ll replace some jobs, but mostly Mills sees people working with robots. Indeed, the combination of robotic and AI advances will put more power in the hands of frontline workers in plants and warehouses. They will be able to collect, analyze and act on real-time data themselves instead of waiting for management to process information and give instructions.
Robots will also be part of making manufacturing more of a “service” – products will be conceptualized, designed and made locally using additive manufacturing (3-D printing).
If all this has you worried about robots “taking over” here is a comforting nugget: Goldman Sachs estimates that 85% of the job growth in the last 80 years has been in positions created by technology. Many of us will be working in jobs that don’t exist today, but we’ll still be working.
Materials: Shift From Extraction to Invention
The Cloud is not droplets of data floating in the air, it’s Walmart-sized warehouses of computers, connected to each other and to the outside world with physical infrastructure. All of this requires materials.
Throughout history we’ve extracted those materials. As Mills says – you can draw a straight line from the MRI machine to a mine in Brazil. But our reliance on extraction may change because increasingly we’ll be able to use software to synthesize materials ourselves.
Those materials will have extraordinary properties. Some will have sensors allowing them to monitor their environment and change properties. They’ll get hotter, colder, stronger, weaker and even tell themselves to disintegrate. Others will bend light in a way that could make them invisible.
Synthetic materials are a perfect example of Mills’ convergence idea – they can’t be created without AI and powerful computers. Mills quotes Eva Zurek, a scientist who used AI to discover a new material. She says that none of the databases of chemical structures included the materials the algorithm proposed: “…nor could our chemical imagination have dreamt of them prior to finding them on the computer.”
Productivity Growth, Even in Healthcare!
As the chart below shows, productivity has halved since 2010 compared to the previous 40 years. Getting back to previous levels, or higher, could generate faster economic growth without triggering inflation. Mills’ believes the synergies of advances in information, machines and materials creates a path toward achieving this.
The key is healthcare. It’s a sector that could eventually employ 25% of the workforce and it’s been a productivity disaster. Below is a chart from the book showing productivity by sector - the line at the bottom is healthcare. If that line can be made more positive our economic prospects – and with it the prospects for inflation and the government deficit – will be much brighter.
Mills is optimistic. He expects all sorts of productivity improvements. Robots will be cleaning rooms, transporting patients, and assisting with surgery. AI tools will help doctors with diagnostics and software will simplify medical data processing. There’s more – but you get the picture.
During the Great Depression the US economy was quietly experiencing huge productivity gains as it implemented new technologies. Those hidden capabilities then suddenly burst forth, leading the US in its extraordinary war mobilization and post-War boom. Mills thinks a similar dynamic is happening now and that new capabilities will again emerge to both surprise us and drive a new boom.
Let’s hope he’s right.
Both own bookstores - Hanks owns a large chain and Ryan a small independent shop. In the movie Hanks’ big, bad mega chain puts Ryan’s “Shop Around The Corner” out of business. In real life the big mega book stores got crushed by Amazon, while independent shops are now enjoying a renaissance. So technology killed the big guys not the small fries. If no one else has claimed credit for recognizing this irony, I hereby serve notice.
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Great post!!