We live in difficult times: financial crisis, sovereign debt crisis, euro crisis, Syrian conflict, global warming. We are bombarded non-stop with despairing news. In Europe, the mood is morose and the prospects seem dire. The general consensus is that things are going to be bad; the only conversation is around how bad things will get.
Well, I have good news for you for the consensus is dead wrong! We are in fact facing a wonderful future and I want to explain why. Let me take you back in time to the late 1970s for that decade seemed to mark the beginning of the end of western civilization. OECD countries were suffering from stagflation with inflation and unemployment above 10%. We had suffered from two oil shocks. The U.S. had lost Vietnam. The Shah had fallen in Iran. The Soviet Union had invaded Afghanistan. Dictatorships were the norm in Eastern Europe, South East Asia, Latin America and even southern Europe. The Club of Rome had made dire predictions that the world would run out of oil, coal and many natural resources within 40 years.
No one predicted that over the next 40 years there would be democracies across Latin America, Eastern Europe and Southern Europe; that inflation and unemployment would fall dramatically; that we would see the greatest creation of wealth in the history of humanity as one billion people came out of poverty. Six hundred fifty million came out of poverty in China alone, completely changing urban landscapes across the country as a whole. Despite 40 years of record consumption of oil and natural gas we now have more reserves than we did then. The way we work and live has been profoundly transformed by computers, the Internet and mobile phones.
If we take a further step back, we can see that over the last 100 years economic downturns, be they recessions that occur every few years or bigger crises such as the great depression, as painful as they are while we live them, barely register in a background of unabated economic growth. In fact over the last 100 years human lifespans have doubled from 40 to 80, average per capita income has tripled and childhood mortality has divided by 10. The costs of food, electricity, transportation and communications have dropped 10- to a 1,000-fold. Global literacy has gone from 25% to over 80% in the last 130 years.
We have redefined what poverty means. Today 99% of Americans in poverty have electricity, water, toilet and refrigerator. Ninety-five percent have a television. Eighty-eight percent have a mobile phone. Seventy percent have a car and air conditioning. The richest people 100 years ago could only dream of such luxuries.
We are also living in the most peaceful time in human history — not just of recent history, but in the history of humanity. We are truly living in extraordinary times.
Improvements of this magnitude are continuing today. When historians look back at these past 10 years I suspect that what they will find most remarkable is not the euro crisis or the Iran and Afghanistan wars, but the remarkable growth of Africa. Over the past 10 years six of the top 10 fastest-growing economies have been African. Africa is rapidly becoming integrated in the global economy.
Transforming Public Services Through Tech
Before I talk about the changes that upcoming technologies are going to bring to this world and why they make me extraordinarily optimistic, I want to point out existing low hanging fruits in terms of productivity improvements by simply applying existing technologies and processes to areas of the economy that have yet to be touched by them, especially in public services, health care and education, which combined account for over 50% of GDP in all Western countries.
The current environment of austerity has been leading states to want to do less with less. However, we have an extraordinary opportunity to do more with less. Estonia in particular is paving the way for others to follow using existing technologies. Over 24% of people voted online in the 2011 elections. Ninety-three percent of Estonians file personal tax returns online. Estonians can set up a company online in minutes. Parents can check their children's homework, grades and attendance records online. All medical records are online. They have a centralized database that pulls information from the various healthcare providers to create a common electronic health record for each patient.
Upcoming Technologies Will Make Life Even Better
Beyond the application of existing technologies to improve current processes, there are new technologies that are emerging that are going to revolutionize almost every sector of our economy including manufacturing, health care, education, communications, transportation, energy, food and water.
3D printing is not only revolutionizing prototyping, it is increasingly being combined with traditional manufacturing to make end products. Twenty-five percent of 3D printer output is production-ready items. It also has the potential to revolutionize medicine as the printing of a mini kidney demonstrated. 3D-printed organs based on your personal genetic make-up will eliminate the organ shortage and rejection issues in the next 10 years.
Medicine is on the verge of a transformation. IBM’s Watson is already better at diagnosing certain types of cancers than doctors are. This makes sense as computers have the patience and eye for detail to go through every millimeter of an MRI scan or x-ray. Granted Watson cost $21 million to build and develop, but with Moore’s law today’s expensive supercomputer is tomorrow’s $100 cell phone. We are less than five years away from having a functioning Star Trek-like medical tricorder: a cellphone-sized device that can diagnose most illness better than most doctors.
Education is also on the cusp of a revolution. If we transported Socrates forward in time 2,500 years the way we teach our kids is one of the few things he would recognize: a teacher, of varying quality, spewing facts at students, of varying quality. Some schools are now experimenting with using gamified learning software to create a challenging personalized curriculum for each of their students with continuous testing. The students are more engaged because they have challenging material at their level. Teachers are freed from being mere fact-spewing machines and can start playing the role of personal coach. A few schools have tried this with extremely promising early results. Education is also in the process of becoming scalable, with the best professors reaching hundreds of thousands of students as many classes on the top MOOCs (Massive Open Online Courses), Udacity and Coursera, have shown. Education is being democratized and is transforming itself in a lifelong endeavor as people from everywhere in the world, of every age, at every stage in life can take classes on the likes of Khan Academy or Code Academy.
Transportation is also radically changing. Every year in the U.S., 5.5 billion hours and 2.9 billion gallons of fuel representing $121 billion in economic value are lost to congestion. Over 1.2 million lives are lost to accidents each year globally on top of the injuries and economic costs imposed by 50 million accidents. We originally thought we would have to rebuild our entire infrastructure to support self-driving cars, but Google has demonstrated that we already have the technology to make autonomous self-driving vehicles. They currently are cost-prohibitive but the technology that they use is already being deployed in the mass market with self-parking systems and automatic braking when traffic slows. In fact Tesla expects to have a car that can drive itself in 90% of situations in the next three years!
Communications are also rapidly evolving. It makes perfect sense for Google to be working on glasses given that cell phones seem bound to disappear. We are making great progress in brain reading. We now have low-resolution scanners than can scan images from people’s brains. We can project our thoughts and make them appear on screen. This currently requires expensive and unwieldy hardware but that is also set to shrink and become cheaper because of Moore’s law. Google Glass will probably evolve to use lasers to print on our retina, taking orders from our mind control rather than by voice. This technology will also give us the potential for telepathy as we will be able to send our thoughts directly to others if they want to receive them. Ultimately the glasses or intelligent contact lenses will probably disappear altogether as we will find a way to send images and thoughts directly to our brains. All this may sound sci-fi but it’s already in the labs and will be part of our reality within 15 years. Remember that 15 years ago few could conceive that we would all have smartphones which we would use as general computing devices. This is merely the next step of this evolution.
Energy is also slowly being revolutionized and its revolution is one of the things making me most optimistic about the future of humanity. Before I explain the profound changes happening in energy, let me provide an aside as to why Malthusians are always wrong. They project consumption and costs linearly into the future, not taking into account the disruptive potential of technology. The Club of Rome predictions about our running out of oil and gas were completely off because they did not factor in the innovations in deep sea drilling and fracking — innovations that were accelerated when prices rose enough to justify investing in them.
The idea that we are going to run out of energy is ludicrous. We are awash in it. Every 12 minutes we receive enough energy from the sun to meet all of our energy needs for an entire year. As Peter Diamandis, who runs the X PRIZE Foundation, likes to say, the issue is not scarcity, it’s accessibility. It’s one we have faced time and time again. In the 19th century aluminum was the most expensive metal in the world. It was more valuable than sliver, gold or platinum. That’s why the tip of the Washington Monument is in aluminum. It’s why Napoleon III, when he received the King of Siam in the late 1850s, distributed silver utensils to his guests, gold for himself and aluminum for the king. Aluminum is very abundant. It’s seven percent of the earth’s core, the third most abundant element in the Earth’s crust. The issue is that it does not occur in natural form, which made it incredibly rare. Prices dropped dramatically in a few years after 1886 when chemists discovered electrolysis, which allowed them to separate pure aluminum from its ore.
A similar process is under way with solar energy. It’s following a slow Moore’s law curve with solar power improving 14% per year in terms of energy production per dollar invested. In 1977, solar cells cost upwards of $70 per Watt. In 2013, that cost dropped to $0.74 per Watt, a 100:1 improvement. In fact, the costs dropped 50% in one year in 2011 driven by competition between Chinese manufacturers. Solar is already at grid parity in remote places. Based on current trends it will be at grid parity in sunny places in the U.S. by 2025 and most of the world by 2035. When that happens investments in its deployment will reach tens of billions of dollars. In other words, even excluding disruptive innovation like fusion or radical increases in solar efficiency, without subsidies or government action, we will transition away from a carbon-based economy by the middle of the 21st century.
In fact the marginal megawatt should become so cheap that we should be in a position to “waste” it — the same way we waste the computing power in our cell phone or computer. Think about it. Computing power was so expensive we had to limit access to it. Now it’s so ubiquitous we use it to play Angry Birds or check Facebook. Its very cheapness has unleashed an extraordinary wave of innovation.
The same will happen with energy. Once it’s cheap most of our other problems go away. The idea that we will face a fresh water shortage is also ludicrous. The earth is 70% covered by water. The issue is once again accessibility as only 1.3% of it is surface fresh water. However in a world of unlimited energy it’s easy to desalinate salt water. In fact we may not even need to wait that long as new innovative devices like the Slingshot are coming on stream that can generate 1,000 liters of pure water per day from any water source, even saline or polluted.
Once fresh water is abundant food also becomes abundant as you can grow crops in the desert — and that’s not taking into consideration an agriculture productivity revolution that could come from urban vertical farms.
As people we are truly blessed to be living in this amazing time. As entrepreneurs and investors we have the privilege of helping create this world of tomorrow. We will pick up the mantle left by our forefathers and create a better world for all; a world of equality, of opportunity, and of plenty.
Internet entrepreneur and investor Fabrice Grinda is a scheduled speaker at LeWeb. Grinda, a native of France, has successfully launched and invested in businesses in the U.S., Europe, Asia and Latin America. Most recently, he co-founded and helped run OLX, which claims to be the largest free local classified site in the world, with a presence in over 90 countries and 50 languages, and more than 150 million unique visitors per month. He is also a prolific angel investor with over 100 active investments. Prior to OLX, Grinda was the founder and CEO of Zingy Inc., a wireless media company focused on the Americas which was sold in 2004 for $80 million. In 1998, he co-founded and was CEO of Aucland S.A., a top auction site in Europe. Before that Grinda worked as a business consultant for McKinsey & Company. He graduated Summa Cum Laude from Princeton University in 1996 and was awarded the Halbert White prize, given to the most distinguished economics student, as well as The Wolfe Balleisen memorial prize, awarded for best thesis.