by John Mauldin, Thoughts from the Frontline
Back in 1936, in Esquire magazine of all places, F. Scott Fitzgerald wrote something profound. “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”
As someone privileged to have met some of the world’s greatest thinkers, I know what first-rate intelligence looks like. I am not in their league, but I think I’m pretty good at holding opposing ideas. It’s why I’m often called the “muddle-through guy.” When I consider contradictory scenarios, I figure reality will be somewhere in between. That’s right more often than you might suspect.
So, let’s consider two seemingly conflicting ideas.
- Major economic pain is coming.
- We have a bright, prosperous economic future.
Can both of those be right? I think so.
I explained last week in The Good News Economy how the current recovery should continue for a couple more years. Beyond that lies the Great Reset, featuring the “major economic pain” part. But beyond that is something much better… a time unprecedented in human history, when life will improve in ways we can barely imagine right now.
We’ll have a better chance to get through the Great Reset with assets and sanity intact if we remember the good things waiting for us on the other side and take advantage of them as soon as possible. Today we’ll talk about some of the technology and biotechnology developments that I believe will drive economic growth in the next decade or two. Full disclosure: This is a very short version of my forthcoming book, The Age of Transformation.
Change Happens Fast
Our various gadgets become so integral to daily life that we can forget what life was like without them. I’ve said this before, but it bears repeating: No one on Earth had a smartphone until 2007. That first iPhone, revolutionary at the time, was primitive compared to even today’s low-end models.
Now, can you imagine living without your iPhone or Galaxy or whatever you have? The answer for most of us is probably not. Some Luddites don’t like being online, and to each his own. I like my tech. But that just illustrates how fast the world can change. One invention, in one decade, radically altered both daily life and the global economy. Not without some downside, but I think mostly for the better.
Think about it from the other direction. In 2007, could you have imagined those little devices would have the staggering impact we now see as perfectly normal? Again, probably not. Many imagined the opposite: “Why do I want the internet in my pocket?” Guess what: Almost everyone who said that now has the internet in their pocket and would not dream of living without it. Certainly not if you are a Millennial.
In the next decade, we’ll see multiple inventions bring similar and, I believe, even greater changes. The details won’t be immediately obvious, but the changes will come. By 2030, they will be as ho-hum to us as smartphones are today.
It may not even take that long. The pace of technological change is accelerating, as is the speed at which new inventions propagate around the world. Intangible software and information can spread at lightspeed, while 3-D printing will let manufacturing capacity grow faster and more widely than we’ve ever seen before.
In sum, the kind of change, magnitude of change, and rate of change will all likely speed up considerably in the coming years. It will be a roller-coaster ride. Now let’s look at some of the twists and turns it will bring us.
The Mathematical Reason for Accelerated Change
Back in the late 1700s, maybe a dozen people understood the steam engine, mostly dilettantes doing it for fun. James Watt understood the business implications and eventually built a steam engine that could do the work of four horses pumping water out of a coal mine.
John Wilkinson—who developed a machine to make a true bore so cannons could shoot longer and further—decided to use steam engines to power his fires. He took the engine apart, saw that the “bore” of the engine was not true and redid it. Voilà, a 16-horsepower engine. Then dozens and eventually hundreds of engineers and tinkerers improved performance further.
Fast forward to today. Today we routinely throw hundreds of scientists and engineers at much simpler problems. But it is going to accelerate even more.
Google and Facebook are in a race to make wireless internet available to every part of the earth. Google will use what is known as high balloons and Facebook is working on solar drones. Google is already supposedly circumnavigated the globe at one meridian in the southern hemisphere. Both technologies are viable, it will simply be a matter of which is the less expensive and more workable.
In the not-too-distant future, and certainly by 2025, wireless voice and data networks will be available to every human on the earth.
By the middle of the next decade, Wi-Fi will be essentially free or at negligible cost. Seriously. That means three billion more people will be connected to the internet. If 0.0001 percent of those three billion people (or merely 30,000) create a major new technology or business idea, that will accelerate the pace of change and make life better for all of us. Give them access to the internet and artificial intelligence expert systems, and stand back and watch what happens as individual humans try to improve their own lives.
Turning Back the Clock
Demographic challenges lie behind many of our economic problems, and the #1 demographic challenge is aging. Specifically, too many of us aging at the same time and not doing it very well. The resulting health problems both cost money to treat and may remove us from the workforce when we could otherwise stay happily productive.
