The exponential era. By Azeem Azhar. distraction books; 352 pages; $28.99. Published in Great Britain as “Exponential”; Random home company; £20
Human limits. By Michael Bhaskar. MIT press; 432 pages; $29.95. Bridge Street press; £20
Masters of scale. By Reid Hoffman with June Cohen and Deron Triff. Currency; 304 pages; $28. Bantam Press; £20
huhISTORIN OF SCIENCE distinguish between useful discoveries, such as dental floss, and ‘general purpose technologies’ that can be used for a variety of purposes, such as electricity, which powers everything from factories to streetlights to televisions. These transformative inventions and the gadgets that spawned them were developed at a rapid, industrial pace in the 19th and 20th centuries. Now, however, a new phase of progress is underway: many technologies do not follow linear growth, but exponential ones. This does more than accelerate innovation. It poses far-reaching challenges for companies, governments and society.
Many Western institutions are unprepared for this shift because they are stuck in an industrial age mindset, say three new books. There’s a good reason for this: People are generally much more familiar with linear growth, where things change or add up little by little, than they are with the exponential kind, where they double or triple (or more) with each step. For example, if a step is one meter long and you take 25, you have traveled 25 meters. But if each stride grew exponentially, doubling from one to two to four meters and so on, your seventh pace would cover a football field — and your 25th would cover 33 meters, or nearly the circumference of the Earth.
It may seem slow and boring at first, but exponential change suddenly becomes unfathomably dramatic. The world is in the midst of such a transformation, says Azeem Azhar. He notes that computer technology has long adhered to Moore’s Law, according to which the power of a computer chip (measured by the number of transistors) doubles every two years, basically with no increase in cost. But, says Mr Azhar, today such exponential growth also characterizes other technologies accelerated by digitization or advances in artificial intelligence (TO THE). These include solar cells, batteries, genome editing, augmented reality, 3NS manufacturing, online business, even electric cars and urban farming, but unfortunately also online disinformation, cybercrime and warfare.
A whole host of superstar companies are emerging thanks to these technologies. They dominate their sectors due to network effects, where using the same platform is generally beneficial. For example, Alibaba, a Chinese e-commerce giant, created an online payment system in 2004. Nine years later, that was the world’s largest mobile payment platform, called Ant Financial. Having an abundance of data allowed it to improve its service, making it more popular, allowing it to collect more data—a cycle known, in a term popularized by Jim Collins, a management scientist, as a “data flywheel.” effect .
Ant Financial’s data scientists found that women who bought skinny jeans were also more likely to pay for phone screen repairs. They speculated that the handsets slipped out of the pockets. So the company started targeting screen insurance offers to women who wore skinny jeans. Because of such insights and targeting, 80% of its customers use at least three out of five financial products. Traditional banks that don’t have such data are at a huge disadvantage – what Mr Azhar calls “the exponential divide.”
With his experience as a starting entrepreneur, tech investor, innovation manager at large companies and journalist (including 25 years ago at The economist), Mr. Azhar is well placed to decipher these digital trends. He has a knack for questioning and inverting conventional thinking, for example by arguing that the adoption of exponential technology leads to more jobs, not cutbacks – witness the rising workforce of growing companies such as Amazon or Ocado, a British online grocer. The resulting unemployment, he says, is due to the companies that fail to adapt, not the companies that do.
Exponential or bust
The importance of leveraging technology for business is the theme of “Masters of Scale” by Reid Hoffman, a co-founder of LinkedIn, and his two co-writers. Readers of his book (based on a popular podcast of the same name) will need to look beyond the virginal clichés with which he begs would-be tech moguls to “Shoot for the Moon” or “Get in the trenches.” In contrast, when he delves into the stories of his fellow entrepreneurs, Mr. Hoffman skillfully conveys the essence of their strategies.
For example, Kevin Systrom launched a photo-sharing app that grew exponentially by reducing its features rather than, as you might expect, expanding them: within ten weeks it had 1 million users. The company, later called Instagram, was sold to Facebook for more than $1 billion when it had just 13 employees. (Mr. Hoffman rightly advocates “blitzscaling,” or doing whatever it takes to get big fast.) Often a founder’s story is a mix of myth and pabulum, but underneath it are usually bold decisions that affect the fate of the company. influenced. The book highlights the critical, often eccentric insights that have led to warp-speed success in some cases.
The implications of this technology and business trends for economic growth and the advancement of knowledge are the theme of Michael Bhaskar in “Human Frontiers”. He joins the debate about the ‘great stagnation’: the idea that innovation becomes more difficult because the most tangible progress has been made. This provocative statement – which is much more bleak than Mr Azhar’s – makes the investigation more expensive and the findings less dramatic. Much of the current innovation is focused on deepening the understanding of existing science rather than exploring new territory.
Mr Bhaskar used to be a writer for Google DeepMind, a top company TO THE laboratory, and he fluently explains the stakes of the debate, and the way the frontiers of knowledge have expanded in episodes ranging from the scientific revolution to the upheavals of TO THE. But maddeningly, he refuses to answer the question he asks. “Our ideas,” he writes, bathing, “will either quickly back away from the frontier or keep rushing toward it.” Exponential or bust, in other words.
Cynics may chuckle at the hype surrounding tech companies. But companies of exponential age often enjoy the last laugh, whether it’s Amazon’s routing of Sears, Netflix’s besting of Blockbuster, Apple’s defeat of Tower Records or Instagram’s kibosh of Kodak. In any case, the upstarts were better at co-opting digital tools and applying them creatively. These books make convincingly clear that something extraordinary is happening in business and society. But they are far from the end of the conversation. ■
This article appeared in the Books and Art section of the print edition under the headline “The Ascent of the Machine”