Do you feel a bit lost sometimes or left behind by the frenetic pace at which technological change happens? You are not alone. Many of us have the impression that social norms, organisations and national policies do not fit the new reality created by the tech changes seemingly happening at lightning speed. More people are falling through the holes in the safety nets we created in the last century. Governments aren’t collecting enough revenue because our tax systems don’t fit the reality of the digital companies, which are making billions. Management seems antiquated when it doesn’t take the possibility of remote work into account. Inequality has increased because the power of labour unions has waned. And the list goes on. There seems to be a growing gap between technology and society.
Azeem Azhar, the London-based creator of the influential Exponential View newsletter and podcast, uses mathematical concepts to help us to visualise this chasm between tech and society. Technological change, he explains, is exponential whereas institutional change is linear. (He uses the terms “geometric” and “linear”. The key difference is that exponential growth happens ever faster; while linear growth happens gradually). In between is an exponential gap that we struggle to bridge. In his must-read new book entitled Exponential: How to Bridge the Gap between Technology and Society, he describes the exponential age in which we live and the problems caused by the gap between technology, on the one hand, and society, organisations and politics, on the other.
“There are many reasons why human-built institutions are slow to adapt, from the psychological trouble we have conceptualising exponential change, through to the inherent difficulty of turning around a big organisation. All contribute to the widening gulf between technology and our social institutions,” Azeem Azhar writes.
We are living in a time of profound transition as we move from the industrial age to the exponential age, but many of our institutions are ill-prepared for this. Faced with the fact that a growing number of workers find the idea of being tied to one company for many years less and less attractive, companies should make it a strategic objective to understand our exponential age so as to bridge the exponential gap. Many organisations seem to be in a difficult position, however, as they struggle to attract candidates and to compete with agile new companies that are moving rapidly to dominate their industry.
How do we bridge that gap? Exponential offers ideas to think about and avenues to explore to begin the work. Decision-makers in companies and governments would do well to read this book
“Exponential technologies are being driven by three mutually reinforcing factors—the power of learning by doing, the increasing interaction and combination of new technologies, and the emergence of new networks of information and trade.”
“By the beginning of 2016, six firms based on exponentially developing digital technologies — Apple, Tencent, Alphabet, Microsoft, Amazon and Facebook — were among the top ten largest on earth. This is what I mean by the Exponential Age. We are no longer just living in a period of exponential technologies — but at a time when these technologies and their effects are a defining force in our society.”
-Azeem Azhar in Exponential
How the exponential age came to be
For many years Azhar has been meticulously curating the news of the exponential age for his Exponential View (EV) newsletter. No new technology escapes him. Advances in the world of energy hold no secrets from him. He covers Silicon Valley, Chinese giants and innovators around the world. Azhar also reviews the societal, cultural and political impact of technology. He discusses the ethics of artificial intelligence, the drift of democracy amplified by social networks and transformations in the art of war.
For some years, his Harvard Business Review EV podcast has allowed him to have conversations with remarkable leaders, thinkers and innovators. Azhar is optimistic about our ability to solve the world’s problems with technology. Yet he is critical of the effects of an exponential age that is poorly understood and badly regulated. Technology is not neutral. It reproduces the biases of those who design it.
Exponential is the result of several years of work. In the book, he sheds light on concepts such as the exponential age, which is also the title of the US edition of the book. The idea is simple: transformations in computing, energy, biology and manufacturing are defined by constant acceleration. The exponential age started with computing in the 1970s, it continued on and quickened with the rise of global markets and the astounding way all new technologies are combined to generate more innovation. Last but not least, powerful network effects influence all aspects of the economy and our lives.
Azhar explains that Wright’s Law is more central to the exponential age than the now-contested Moore’s Law, which states that the number of transistors on a chip doubles roughly every two years while the cost of computers is halved. Wright’s Law focuses on the learning curve in manufacturing. Wright was an aircraft engineer who discovered that “for every doubling in units produced, costs would fall by a constant percentage.”
The exponential gap is a threat to all non-exponential organisations
Humans aren’t equipped to grasp exponential growth. This cognitive difficulty was perfectly illustrated during the pandemic when policy makers seemed not to fathom the exponential growth of each new wave of Covid contaminations. Each of these curves looks slow at the beginning. Its progress is so unimpressive initially that most people pay little attention to it.
Though this example isn’t in the book, this cognitive problem is best illustrated by the wheat and chessboard problem: if a chessboard were to have wheat placed upon each square such that one grain were placed on the first square, two on the second, four on the third, and so on (doubling the number of grains on each subsequent square), how many grains of wheat would be on the chessboard at the finish?
The total number of grains is 18,446,744,073,709,551,615. Unless you’re very good at mathematics, you can’t even read that figure. That’s 18 quintillion, 446 quadrillion, 744 trillion, 73 billion, 709 million, five hundred and fifty-one thousand, six hundred and fifteen, which equates to more than 1.4 trillion metric tons. That’s 2,000 times the annual world production of wheat, as explained in Wikipedia.
We humans are better at incremental changes. We understand the seasons, our human lifespan and the (linear) productivity of an assembly line. We don’t get the exponential phenomenon of artificial intelligence nor the effect of Wright’s Law. Likewise all our legacy institutions—social norms, policies and organisations—weren’t designed for an exponential age. They often move too slowly to adapt.
The exponential gap is the result of the difference between the increased pace of change and our society’s ability to keep up. It explains many of the problems we face, as our legacy institutions aren’t fit for our day and our age. Our school system is still organised to fit the Fordist, factory-centric age. Our management largely ignores the new decentralised, flexible models of working. Our tax system was optimised for the industrial age. Our social protection institutions had salaried factory or office workers in mind but now cover fewer people.
As the gap widens, resentment and tension increases. Some of that resentment will fuel populism and conspiracy theories. As the gap increases between the safety net and people’s actual needs, between the organisation of work and what could be possible in the exponential age, more people are left behind and left feeling angry too.
Exponential companies are changing the rules of the game
It used to be that scale would at some point weaken a corporation. Diminishing returns and physical constraints would put a limit to an organisation’s ability to keep growing. Unlike industrial age corporations, today’s digital giants aim to take all (or most of) their market. In sector after sector, the winner-takes-all paradigm changes the rules of the economic game. Netflix has been winning the streaming market, although newcomers are challenging its dominance. Uber won Europe’s and the US’s ride-hailing market. Google has won the advertising market.
Increasingly, the gap between the new winner-takes-all entrants and established corporations is widening even as the pace of change is accelerating. The same economic forces that led to the creation of digital giants may conquer new markets and eventually shape all of our economy. In the new paradigm, being bigger makes a company stronger. Fuelled by network effects, the best performers in winner-takes-all markets capture an increasingly large share of the pie. This increases inequality and causes old players to shrink and eventually go bankrupt.
“Exponential technologies seem to imbue companies with powers that allow them to defy the force of gravity that held back firms of earlier generations. Economists call this new type of firm the ‘superstar company’,” Azhar writes. “While we’ve always had firms that do better than others, the difference between the best and the worst is greater than ever.”
And what about the way we work?
As I explain in my book, Du Labeur à l’ouvrage (From Graft to Craft), the transition from the industrial age to the digital age is leading to the unbundling of Fordist-style practices. In exchange for accepting the division of labour and subordination, workers used to be offered an attractive package that included job security, social protection, healthcare and a pension. But since the beginning of the exponential age, the package has been increasingly challenged. There are now gig workers who have the subordination without the benefits. At the same time, many salaried staff are looking for more freedom and more appealing options.
Although automation is unlikely to cause the end of work, it often makes work more alienating. Management by algorithm of work-on-demand platforms, for example, tends to treat workers like machines. Furthermore, many workers aren’t covered by minimum wage rules because technically they are self-employed. In relative (and sometimes absolute) terms, workers’ incomes have declined over the past few decades.
The book doesn’t deal with HR departments in large organisations. But theirs is a typical example of an exponential gap in action. These institutions address “human resources” in the strictest sense (ie salaried workers who are the company’s employees) and ignore the increasing number of stakeholders who tend to replace them such as suppliers, consultants and freelancers. The risk is that this blind spot will jeopardise their strategic relevance.
In conclusion, this book is a must-read to understand the transition that affects so many aspects of our lives. In this article, I focused primarily on work-related subjects, but Azhar explores many other angles such as the process of de-globalisation (“the world is spiky”) and the commodification of our relationships (“exponential citizens”). The author is optimistic but cautious. If we do not learn to bridge the exponential gap and create institutions fit for this age, we’re at risk of seeing the very fabric of our society and all our democratic institutions destroyed. We “have agency over where technology will take us,” he writes. “It is our choices and our circumstances that determine how technology is actually used.” That’s why it’s up to us to build the “world of abundance and equity” that the exponential age could potentially bring about.
Photo: Welcome to the Jungle
More from: Laetitia Vitaud
Future of work author and speaker
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