Exponential technologies

We’re at a historic moment in time, technology-wise: there are lots of new and emerging technologies set to transform how we do things. We’re talking 3D printing, artificial intelligence (AI), alternative proteins, autonomous vehicles, digital biology, and quantum computing – revolutionary stuff. These kinds of developments are called “exponential technologies”, and there are two criteria to being considered one. 

First, a technology like computers, is exponential if it doubles in performance, whether in processing speed or capacity, while the cost of having access to such technology halves over the same period. Computers are a great example: since they were first invented, computers have rapidly doubled in processing performance roughly every two years. This phenomenon is called “Moore’s law”,¹ and it’s shared by all exponential technologies.

Second, exponential technologies are highly disruptive: they lead to massive changes in how we live, work, and operate day to day. These technologies have the potential to impact billions of people and change our economies and societies. Take drones for example: they went from select military work to mass use – as tools for search and rescue missions, fighting wildfires, environmental monitoring and even food delivery. 

Exponential technologies present an increasing, fundamental threat to the status quo, which can ultimately impact every industry and every investment portfolio. 

Businesses that leverage exponential technologies can disrupt industries and potentially grow at scale. For example, some companies are working on implementing the use of drones to make deliveries. That could completely disrupt the way we shop, not to mention how the retail sector operates overall. But as exponential technologies take hold, lots of businesses may suffer too. 

Exponential technologies present a potential opportunity to generate returns. 

That’s why it’s important to understand major exponential technologies and the opportunities they may offer. 

Exponential technologies can be broadly categorized by the unstoppable trends they contribute to: healthcare revolution, digitization, and the future of energy.

Healthcare revolution: Diagnostics, therapeutics, biotechnology, and vaccines are undergoing some of the most rapid transformations in history. It’s more accessible than ever to sequence and engineer DNA. And these advances have some incredible applications in disease identification, forensics, microbiome testing, and stem cell engineering. 

Other major exponential technologies in healthcare include cellular agriculture (growing meat without an animal), remote medical monitoring, and personalized medicine and cancer treatment (thanks to a better understanding of each person’s DNA). Covid-19 has also sped up the introduction of mRNA vaccines, which could transform how we combat current and future diseases. 

Digitization: Advances in computing power and hyperconnectivity – like the spread of 5G – are pushing the digital transformation forward. One major exponential technology here already is AI, which is leading to significant advances in automation, robotics, and cybersecurity. Virtual reality’s another exciting advancement that could seriously impact how we work and communicate, especially if the metaverse is adopted worldwide.

The future of energy: Exponential technologies are driving the global adoption of alternative energy and reducing our carbon footprint. Transportation is a major consumer of energy all around the world, and a number of green transport innovations are in the works. Hydrogen-powered rail, autonomous vehicle networks, hyperloops, and electric vehicles are good examples. There have also been significant advances in carbon direct air capture technologies, which extract CO2 directly from the atmosphere. 

Disruption and innovation are not always beneficial. While exponential technologies typically create improvements, they can also lead to harmful consequences across society. Social media propaganda and biases in machine learning (between ethnicities and genders) are two exponential technology challenges we’re dealing with right now, and it’s likely that many more may appear in the future. 

Exponential technologies are generally considered to have three main risks:

Governance: One big issue with exponential technologies is who has control. With great power comes great responsibility, and parties with malicious intent using these technologies could pose existential risks to humanity. Rapid developments in AI, digital biology, and bioweapons, for example, could be very dangerous in the wrong hands. There are also numerous unintended consequences that could arise from the use of this incredibly powerful technology without proper care and foresight. 

Manipulation risk: Certain exponential technologies can lead to the manipulation of large groups. Social media and AI innovations, like “deepfakes,”² which can seamlessly replace an existing image or video with someone else, are making it hard to distinguish what’s fake from what’s real. It’s also increased the amount of misinformation individuals are regularly exposed to, altering social and cultural behaviors globally. Appropriate regulation and monitoring is crucial to help minimize the risk of manipulation via exponential technologies.

Ethical challenges: Many exponential technologies bring up important ethical questions that must be answered. Think accident prevention in autonomous vehicles: there might not be a course of action that avoids an accident completely. In such a case, which action should the vehicle take? A machine must be programmed to choose – and that choice may be between, say, killing the driver of the car or killing a bystander. Technology can sometimes exacerbate already-existing human biases. Machine learning, a critical part of AI, requires significant data input to function well, but this data is often biased (gender, ethnicity, socio-economic) which can result in large scale biases in AI decisions.