• Jim Foran

Exponential Technologies - a springboard for Digital Transformation

Updated: Apr 13, 2021

Affordable innovation is within reach and getting cheaper every day

We live in remarkable times, a world of increasing abundance. With digital ecosystems, we get ever improving performance at ever lower prices. How do you think innovative start-ups have been able to tackle the old, established Goliaths? By clever use of Exponential Technologies.

But First, back to the future

Many of us are familiar with Moore’s Law: the idea that the number of transistors on an integrated circuit of equal size (and therefore roughly, computational power) doubles every year. Initially posited by Intel co-founder Gordon Moore in the mid-60’s as a ten-year estimate, it became renowned for its accuracy over many decades. It was a type of scientific-wild-ass-guess that proved reasonably accurate.

But you are likely not as familiar with Ray Kurzweil’s Law of Accelerating Returns. A highly unusual and sometimes controversial fellow, Kurzweil was an early inventor in the fields of optical character recognition, flat-bed scanners, and other digitalization technologies. A keen optimist in the future, he developed his law (again, more of a SWAG) at the turn of the millennium by observing that Moore’s Law is a continuation of an exponential trend going back over 100 years.

...Moore’s Law is a continuation of an exponential trend going back over 100 years.

Kurzweil looked at the prior century of computing technologies (that enable ‘calculations’) and mapped computational power per constant $1,000 over time. Lo and behold, an exponential trend emerged, showing a clear extrapolation of Moore’s Law all the way back to the late 1800’s.

While the physical mechanism for calculation may have changed (from electromechanical to relays, vacuum tubes, transistors, and integrated circuits), the nature of information growth is exponential.

So what are Exponential Technologies?

Kurzweil’s observations have been shown to prove true for many technologies, particularly those that are ‘digital’ in nature. Exponential Technologies are those continuing innovations that demonstrate a doubling of price/performance improvements roughly every 12-24 months.

Let’s look at some examples in today’s society:

  • Cloud Computing and Big Data - from zero to dominant in just 15 years.

  • Social Media - going 'global' is now in reach.

  • Internet of Things - cheap sensors digitalize our physical environment.

  • Artificial Intelligence - becoming an everyday experience.

  • Renewables/Energy Storage - becoming cheaper than fossil fuels at every scale.

  • 3D-Printing - redefining manufacturing, food supply, and construction

  • Robotics and Drones - freeing human resources for safer, higher-value work

  • Biotechnology - gene sequencing, bioinformatics, synthetic biology

Hitch Your Wagon – the Exponential Organization

In Canadian Salim Ismail’s book Exponential Organizations, he offers the following definition:

An Exponential Organization…is one whose impact (or output) is disproportionally large—at least 10x larger—compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.”

Ismail reminds us that humans are linear thinkers. Two, four, six, eight, ten, etc. Our very nature keeps us from easily recognizing the power of exponential growth. Those business leaders who recognize and exploit exponential trends quickly gain an insurmountable advantage. Two, four, eight, sixteen, thirty-two, etc.

Business leaders who recognize and exploit exponential trends quickly gain an insurmountable advantage.

He observes that leaders like Elon Musk think about where an exponential trend will be in ten years and builds his companies to intersect that point. For many, businesses like SpaceX and TESLA seemed preposterous a decade ago.

Smart Business

It’s important to note you don’t need to be an exponential pure player in order to participate in the underlying growth. Exponential Technologies have become mainstream and increasingly commoditized. It’s not risky business; it’s smart business.

We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” – Bill Gates, The Road Ahead (revised)

Done properly, your Digital Transformation and innovation programs ride this exponential surge, making your organization increasingly more relevant to customers, investors and employees.

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