February 23, 2016
The Law of Accelerating Returns
2 min read
I recently had the opportunity to interact with Ray Kurzweil at Abundance 360. Ray is the author of a number of books including “The Singularity is Near", as well as a prolific inventor, co- founder of a university and futurist. In his books, he has made over 150 predictions about the future and 86% of them have come to pass.
Ray’s claims his predictive success is largely due to understanding the increase in computational speed and applying those exponential changes to other technologies. He has proposed the Law of Accelerating Returns, which says:
“An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense “intuitive linear” view. So we won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate). The “returns,” such as chip speed and cost-effectiveness, also increase exponentially. There’s even exponential growth in the rate of exponential growth. Within a few decades, machine intelligence will surpass human intelligence, leading to The Singularity — technological change so rapid and profound it represents a rupture in the fabric of human history. The implications include the merger of biological and nonbiological intelligence, immortal software-based humans, and ultra-high levels of intelligence that expand outward in the universe at the speed of light.”
There are a lot of people smarter than me who understand this well, but what I grasp is that things are speeding up. And I understand most people don’t get it. As humans, our experience is that things happen today and tomorrow pretty much like they did yesterday, and rates of change are gradual.
The convergence of myriads of technologies, fueled by dramatically increasing computational power and speed is changing the “one foot in front of the other” framework of our experience. Think about the scene in “Star Wars” when the ship jumps into hyperspace at light speed? That illustrates what moving from linear to exponential means.
For those of us in the insurance agency business light speed will mean hail-proof roofs, widespread acceptance and use of self-driving cars, vastly superior long-range weather prediction, virtual reality combined with artificial intelligence providing real-time robotic customer service and other things, within 10 years.
Some of these things will create advantages for us like the customer service experience which lowers our cost of doing business. Others, like the self-driving car and hail-proof roofs, will lower premiums and commissions. It’s all pretty exciting and scary, but it’s clearly coming, faster than we can wrap our brains around.
What, as growing insurance agency owners, do we do about it? I think the answer is simple: adopt as many new technologies as possible as quickly as we can. Experiment. Kill failures fast. Expand on successes as fast as possible. There IS a place for us in the future if we are agile. What do you think?