Innovation in the Exponential Age
Innovation has always been critical to the development and growth of organizations of all kinds. Companies must innovate to remain competitive. Same for countries. This is even more true in the exponential age we are now entering. And (unfortunately) in times of crisis.
There are many definitions of innovation (1). For me, it is about an idea that is executed, creates value and is used on a large scale. It needs all these components to be called innovation.
Innovations can be many things: a new product, a new service, a new business model or a new process (within an organization).
As Azeem Azhar describes in his book Exponential (2) we have entered the exponential age in which Innovation is driven by 4 exponential technologies: Artificial Intelligence (Computing), Energy (Renewable Electricity and Energy Storage), Biology (Genomics and synthetic biology) and Addictive Manufacturing (3D Printing).
Exponential technologies are characterized by the fact that they improve by more than 10% per year over several decades – at roughly the same price. This means that for the same price, these technologies become at least 2.5 times more powerful every 10 years – and sometimes much more.
Computing and Artificial Intelligence
Computing power is the best-known exponential technology – and Gordon Moore described this with “Moore’s Law” back in the 1960. It is one key reason for the Artificial Intelligence breakthroughs over the last decade (see also my post The AI century).
Renewable Energy and Storage
We can see the same exponential development with renewable energy and energy storage. In the 10 years to 2019, the cost of generating electricity from wind turbines declined by 70 per cent, or about 13 per cent per annum. Solar power is following the same trend. The cost of lithium-ion storage dropped by 19 per cent per annum for the whole decade from 2010.
Biology and Genomics
The genomics field has developed exponentially since researchers first sequenced the billions of chemical letters that make up the human DNA in 2003. Sequencing prices have dropped 100,000x to around $1,000 per genome. In 2020 BGI announced it was capable of sequencing a full genome for only $ 100–representing which would be a million-fold improvement in less than 20 years (3).
In any case this is an even faster development compared to Moore’s Law.
Addictive Manufacturing – 3D Printing
Addictive Manufacturing is the newest of the exponential technologies. But we can see the same exponential developments over the last 2 decades. Between 2001 and 2011 the average price decreased 51 % after adjusting for inflation (4).
Innovation in the Exponential Age
Exponential Technologies accelerates Innovation. Exponential development will open up new possibilities at an ever increasing speed
The exponential development has two sides: increase in potential and decrease in price.
As a consequence: ideas that do require more potential of a technology can be realized soon. Ideas that are too expensive today can be realized soon. Both making innovation happen at a faster and faster pace.
And there is another even more important driver of innovation: combination
Technologies can be combined – creating new innovations. This is especially true for AI as it is a general purpose technology (gpt)
In their 2022 Big Ideas report ARK Invest (5) has identified 2 additional technologies or innovation platforms as driver of innovation: Blockchain and Robotics.
In itself these technologies have a great potential for innovation solutions. Combining them will give us even more opportunities.
We can see this happening now.
AI and Genomics: “AI-Designed Protein Able To Awaken Dormant Genes” (6)
AI and Biology: “First Wholly AI-Developed Drug Enters Phase 1 Trials” (7)
AI and 3D-Printing: “Accelerating the discovery of new materials for 3D printing” (8)
Innovation is becoming strategically important for all organization. Again this has 2 sides. Organizations have to create innovations (in their core business) at a faster pace. They also have to adopt innovations (like AI solutions in many of their business processes) to stay competitive.
The same is true for countries . Countries have to become more innovative (e.g. with disruptive innovations) creating tomorrows business leader. The industry has to adapt new innovations to defend the economic success of countries.
This is true for Europe and especially in Germany . We do need more knowledge about the technological change and exponential technologies in our societies.
We also need a cultural change in the way we deal with innovations. A culture that allows for failure, that allows for more trial and error. A discussion about our public investment in innovation and, of course, a discussion about how these innovations will help us secure not only our economic future, but more importantly, our democracies and open societies – and the well-being of us all.
Even more now in the time of a crisis which we have not seen for decades.
(1) What is innovation – 15 experts share their innovation definitionhttps://www.ideatovalue.com/inno/nickskillicorn/2016/03/innovation-15-experts-share-innovation-definition/
(2) Azeem Azhar – Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It
(3) BGI offers 100$ Genome Sequencing
(4) NIST – Costs and Cost Effectiveness of Additive Manufacturing (2014)
(5) ARK Invest – Big Ideas 2022
(6) AI-Designed Protein Able To Awaken Dormant Genes
(7) First Wholly AI-Developed Drug Enters Phase 1 Trials
(8) Accelerating the discovery of new materials for 3D printing