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The Next Industrial Revolution

Tuesday, January 10, 2017 18:13
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This post The Next Industrial Revolution appeared first on Daily Reckoning.

Has the human species reached a technological and economic peak? Are its most significant inventions behind it?

Until the 19th century, progress came in inches. The fastest mode of transport in A.D. 1776 was the fastest mode of transport in 1776 B.C. — the horse.

Global trade flowed to the relaxed rhythms of wind and tide, as it had since opening whistle. Life was intensely agricultural. Until the late 19th century, nights were lit by fire… as they’d been since ancient times. And economic growth?

One Angus Maddison is an historian of economic growth. And he says the annual growth rate of the Western world between year 1 and 1820 averaged an invisible 0.06% a year. That’s 6% a century.

Then in the later 19th century leading up to World War I, something remarkable happened…

A series of inventions came along in the mid to late 19th century that raised the curtain on a golden age of technological and economic progress… an era of such grand razzle-dazzle it had no equal in history. And some say it might never happen again…

The railroad, steamship and internal-combustion engine revolutionized transportation. The telegraph, telephone and radio conquered time and distance. The electric light bulb turned night into day, and electric power advanced progress on a thousand fronts. Industry exploded. So did cities.

The result was a “special century” of technological and economic progress from 18701970.

Robert Gordon is an economist at Northwestern University. Last year, he wrote a book called The Rise and Fall of American Growth. His thesis, dripping ice water, is this:

These inventions were so powerful, so transformative, their impact can never be equaled. Man’s growth spurt of the past 150 years is that of a youth leaving puberty — his greatest growth is over. Gordon:

The economic revolution of 1870–1970 was unique in human history, unrepeatable because so many of its achievements could happen only once… the revolutionary century after the Civil War was made possible by a unique clustering, in the late 19th century, of what we will call the “Great Inventions”… What makes the period 1870–1970 so special is that these inventions cannot be repeated.

“With a few notable exceptions,” Gordon adds, “the pace of innovation since 1970 has not been as broad or as deep as that spurred by the inventions of the special century.”

It seems there’s justice in this view. You can only invent the light bulb once, after all. And is it a coincidence that broader American prosperity began slipping around 1970, as the “great inventions” ran their course?

What truly astounds is the pace of it all. They packed more technological progress in one century than a dozen combined. From the Wright brothers to the moon in 66 years. Impossible — but there it is.

Has there been progress since 1970? Of course, there’s been progress. Sure, you can build a more efficient jet. You can make a better car with all the bells and whistles. There’ll be more joy in heaven and such. But it’s progress mostly at the margins.

We’ve haven’t invented the equivalent of the internal-combustion engine or the telephone… not to mention electricity.

Advances have been so heavily concentrated in areas like communications technology. And that can only yield so much.

Venture capitalist Peter Thiel observed in 2012 that “Whether we look at transportation, energy, commodity production, food production — that with the exception of computers, we’ve had tremendous slowdown.”

Thiel wraps it all in a bow with this zinger: “We wanted flying cars. Instead, we got 140 characters.”

We can’t help but agree. It’s a counterfeit progress indeed when someone in Kathmandu can follow the latest intrigues of Kim Kardashian on Twitter… but drives the same basic car his grandfather drove.

But is all this about to change? Are we in for another great technological revolution?

Some argue the world’s perched on the bleeding edge of such dramatic breakthroughs in the fields of robotics, artificial intelligence (AI), computing and other technologies… that they’ll rival — if not excel — the “special century.”

At last year’s World Economic Forum meeting, per The Economist, German engineer and economist Klaus Schwab said the coming revolution “will be bigger than anything the world has seen before… It will be a tsunami compared with previous squalls.”

Is he right?

Some estimate robots will replace half of all jobs in 20 years. Not just blue-collar manufacturing and construction jobs, but white-collar jobs in law, medicine, accounting, etc. The military too. Why risk a soldier when a robot will do and doesn’t bellyache? Driverless cars are only a few years away.

But that’s just the start. What happens if robots grow smart enough to do it all?

Will humans find new sources of labor as they always have before? A robot arm that can rivet a car door is one thing. But a genius robot that can do anything you can do — only better — is quite another. What if the robots take over one day?

Not even the oldest profession is safe from the robot revolution, apparently, and therein lies a tale in itself!

We jump ahead of ourselves, admittedly. But is the world ready for such a future? Maybe it is… and maybe it isn’t…

Change and progress aren’t always the same.

Regards,

Brian Maher
Managing editor, The Daily Reckoning

The post The Next Industrial Revolution appeared first on Daily Reckoning.

This story originally appeared in the Daily Reckoning . The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.



Source: https://dailyreckoning.com/next-industrial-revolution/

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