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January 1st, 2018 at 1:01 pm

18 exponential changes we can expect in the year ahead

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Where will the trajectory of the tech world, from cryptocurrencies to Silicon Valley culture, take us in 2018?

Azeem Azhar is a strategist, product entrepreneur, and analyst living in London. He is the curator of the weekly newsletter Exponential View, from which the following is adapted.

This is the first year I am presenting predictions for the coming year. I’ve received some incredibly helpful comments from readers via Twitter. This has encouraged me to stick my head above the parapet.

Many trends, in particular the convergence of multiple technologies which are improving exponentially, continue. Climate change will continue to be a most pressing issue, especially as we eat our way through our carbon budget.

As Bill Gates said, “Most people overestimate what they can do in one year and underestimate what they can do in 10 years.” Likewise, most annual predictions overestimate what can occur in a year, and underestimate the power of the trend over time.

Here are 18 areas which I think will be interesting to watch in the coming year:

1. International relations, the political economy, and governance will desperately need new design patterns as we enter a new phase of the digital revolution.

These should be developed in the public sphere with a wide range of participants. Three major themes to explore:

The massive global platforms—Facebook, Google, Amazon, and the like—are defining a new political economy. Their corporate sovereignty will chafe with states’ own sovereignty. Those same nations will curry favor with the platforms to win the putative economic benefits provided by them. The large platforms know that governments will seek to rein in their power through regulation or legislation. These firms will accelerate their efforts to secure platform advantage and raise the baseline from which their settlement will be judged in the years to come.

National AI strategies will emerge from more countries. The result? More grounds for cooperation and more reason to argue about intellectual property, privacy, data, and license to operate.

Silicon Valley’s political culture—and how that has been codified into software, corporate culture, and strategy—will continue to smell. The Valley will hire outsiders to fix these problems or, more likely, just for the optics. This will take years. And before we’ve tackled that smell, crypto whizzes will establish governance mechanisms on emerging blockchain networks. They will do so with a narrow, ideological framing that will threaten to hurt us in the coming decades, by which time these networks will mediate many of the resources we need. This matters because information technology systems affect how we build our understanding of the world; they affect how we perceive our set of choices; they affect how we act in that world. In short: they affect our understanding both of the “is” and the “ought.”

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2. While Silicon Valley leads, both innovation and scaling increasingly occur across the globe.

Europe and Central America lead the way in decarbonizing their energy chains. China is making huge strides in large-scale electrification of its urban transport systems. Its focus on AI, supported by the state and its homegrown tech giants, will show up as novel methods and large-scale implementations. And not just in personal surveillance.

The U.S., with its declining health and social outcomes and turn inward, will become less appealing to some entrepreneurs. And its business culture, focusing solely on corporate profits, will lack the motives to innovate in areas that affect the social fabric (for the collective good). Curiously, the European Union will provide room for innovation because of its ability to bring broader groups of stakeholders together than competition alone can foster. In particular, watch the innovation around open banking and privacy in Europe this year.

Leapfrogging in other innovation hubs will continue as well. We may not see an African firm to rival America’s tech giants anytime soon, but we will see meaningful innovation in fields like ag-tech and distributed power generation.

However, the largest firms in the world will hail predominantly from Silicon Valley, and one, most likely Apple, will exceed $1 trillion in market cap this year.

3. More money will flow into technology but it will be concentrated at later stages.

Following Softbank’s lead, funds bigger than $5 billion will abound now that the investment case of platform monopolies is well understood. These will seek to back emerging winners at a regional and global level (look at Careem and Didi Chuxing in ride sharing, for example). This may create funding gaps at earlier stages in the market, as already evidenced by the seed capital slowdown in Europe and the U.S.

4. The AI software stack will continue to diverge from traditional software.

Novel interface mechanisms. One will be voice, both as an input and as the output. The second will be images, where embedded cameras will provide large-scale inputs to machine-learning systems. (One example will be the growth of affective computing applications.)

Specialist hardware (think Google’s TPUs and others) and novel frameworks (TensorFlow and its competitors).

Cloud-to-edge computing, as we deliver an increasingly large proportion of intelligence at the locality where it is needed.

A new paradigm of software development (where the best developers nurture highly parameterized models and cajole the training data to feed them).

5. Artificial intelligence will be the technology investment priority for large firms.

Automating machine learning will make the technology more accessible to non–AI experts.

After years of prototypes, automation technologies and AI software now dominate the CIO’s agenda. They will invest and invest big. One group of winners will be the crop of 2013/2014 vintage AI startups now maturing into serious businesses with meaningful revenues and growing fast. The best firms, incumbent and startup, will combine AI investment with strategic and organizational change. Those same firms will move from simple notions of data supply chains to rethink their business model around data network effects and AI lock-in loops.

Firms that view AI not as a tool with which to expand their offerings but merely to cut costs will become lords of an ever-diminishing manor.

We will see more evidence for the tangible benefits AI tools can give us individually, and we’ll increasingly witness the power of the AI-augmented human.

The collective efforts of the research community continue to impress us, especially as we see low-hanging breakthroughs in areas outside of vanilla deep learning, such as reinforcement learning, adversarial networks, one-shot learning, and unsupervised methods.

(By the way, we’ll be barely any closer to human-like intelligence and no closer to artificial consciousness.)

7. The discussion on how AI will impact employment will shift from solely focusing on the elimination of jobs to how best to help workers accommodate the inevitable change.

Different countries will take different approaches. Those which combine an investment in social goods (like education and a safety net) and maintain a healthy approach to entrepreneurship and innovation will do best.

We will also make more progress in understanding questions of trust, fairness, and justice in algorithmic systems. Sensible boards, prompted by legislators, regulators, and activists will make ethical AI a top-table issue.

8. Cryptotechnologies will become more important and start to demonstrate their utility.

In 2018, the activity in decentralized applications and protocols based on tokenization will increase. Below the speculative froth are sober-minded teams coming together to tackle real problems using the unique attributes of blockchain technologies.

We’ll see AI developers increasingly experiment with the fruitful combination of AI and blockchain. These areas include how to build a data commons to incentivize the sharing of data, allow the sharing of models, and using blockchains and smart contracts for individual AIs to mediate their machine-to-machine interactions.

9. Sordid revelations in crypto-speculation will be outweighed by the wall of money entering the assets class.

Asinine press releases, speculative investors, and shady enablers get out into the market much faster than the technology can become useful. This lurid funk will obscure technology progress as more out-and-out frauds are met with regulatory intervention and commentators watch speculators from the safety of their schadenfreude pulpits.

It may not matter, because every discussion about cryptoassets increases their actuality in the market. This will see an increasing range of products for institutional investors and, crucially, high-net-worth investors wanting to get exposure to this asset class. This speculative bubble might pop, or it might not.

10. KITT, the car from Knight Rider, will remain the gold standard for autonomous vehicles.

Autonomous vehicle pilots will become increasingly ambitious, but the real-world hurdles will still take time to navigate, even with friendly city regulators. None will ship to the public in 2018.

11. Health care becomes increasingly interesting for entrepreneurs.

Why? The first FDA-approved gene therapy is in the market. More approvals are likely to follow. CRISPR is likely to appear in human trials this year, too.

The treatment will be sold by Novartis for $475,000.

Separately, the success of applying deep-learning techniques to electronic health records, low-quality consumer tracking data, and medical images will create confidence in producing breakthrough applications.

Non-digital health care has an ineluctable appetite for cash. Aging populations, coupled with an affordability crunch at both the state and private level, will increase the need for novel solutions—which AI-powered digital health might just provide.

12. A novel cyberattack, in terms of scale or quality, will emerge.

This may involve attacks that leverage some type of machine-learning technology: either using chatbots or natural-language generation, smarter password attacks, taking connected devices hostage, or adaptive systems that avoid detection.

13. The U.S. midterm elections will be a focus of systematic information warfare, with the advantage with the perpetrators.

The main political parties standing for election (and many groups who are not) use a wide spectrum of tools to target, persuade, and mislead voters, such as never before.

14. Augmented reality will continue to simmer rather than boil.

True believers in AR and mixed reality will persevere, but the opportunity for large-scale change afforded by AI and blockchain—especially in fintech, health care, and energy—will attract the majority of driven entrepreneurs. Edge cases that extend reality, especially in industry, will be the most interesting. Smart firms will start to build up their capabilities in this domain today to reap rewards in the future.

15. Digital advertising has been invasive for far too long, and this year ad tech will suffer.

The enhanced privacy features in iOS and Google Chrome, and the requirements of data obligations of the EU’s General Data Protection Regulation will hurt ad tech and programmatic advertising. Facebook and Google will barely notice and will continue to dominate the market.

16. Crypto-mining’s hunger for energy will overshadow the growth of renewables.

The price of renewables will continue to decline and new solar and wind contracts will be substantially below the best fossil fuels can offer. On the downside, the energy consumption of mining Bitcoin and other tokens will continue to grow at more than 20 percent per month, unless there is a huge price correction. So by this time next year crypto-mining will be using about 10 times as much energy as it does today, rivaling Italy’s consumption. Unless, that is, blockchains undergo is a major conversion to proof-of-stake.

17. Ethics will increasingly drive consumer choice and investing strategy.

Consumers will increasingly make purchase and investment decisions based on their resonance with the ethical positioning of a firm. These will get amplified by industry—particularly the insurance industry, which needs to price in risks related to climate change or regulatory malfeasance. University endowments may feel pressure to adjust their investing stance and divest from certain types of assets (or companies). I’ll be intrigued to see if the #metoo movement gets reflected as an investment risk.

18. Buddha, Aristotle, Hayek, and Marx make a comeback.

Marx because the last 50-year consensus between workers and employers and financial capital is strained, so some will look for the pendulum to swing back. Others will look at the combination of increasingly cheap energy (reducing the cost of production toward nil) and increasingly capable machines (reducing the average human’s ability to be paid for their outputs) and argue only a state of radical abundance—or “each according to their needs”—can work. Critics of greater central intervention in our collective affairs will raise the specter of Marx, and often through Friedrich Hayek’s critique of it. Hayek’s notions of the market as the most effective information discovery and transmission mechanism will attract more interest as blockchain-style networks show their utility as resource coordination systems.

Aristotle reasserts himself because while we are wealthier than ever before, his call for eudaimonia (human flourishing) will seem to stand above the noise of “recommended for you” consumerism. Buddha’s relevance will be driven by a greater awareness of mindfulness and contemplation in our dopamine economy. Equanimity will be a helpful characteristic during turbulent times. And as machines appear to be more and more lifelike, and neuroscience unravels more mysteries of our consciousness, the quiet contemplation of our subjective personal experience will become a sanctuary for our humanity.

Via Technologyreview 

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