Sunday, June 6, 2010

AT&T predicts the future (in 1993)

There are plenty of nasty things to say about AT&T, but don’t ever tell me that they’re bad futurists. Check out their “You Will” commercials from 1993. These predictions were made before the internet had exploded into popular use, yet they managed to correctly predict many technologies that are in common use in 2010.

In this series of commercials, AT&T correctly predicted e-readers, GPS, car navigation systems, wireless internet, ubiquitous email, tablet computing, RFID, e-commerce, video conferencing, voice-over-IP, streaming videos, and distance learning. Granted, not all of them turned out to work the way that AT&T probably imagined, but I’d say they did a pretty amazing job given the date of these predictions.

The only thing that I saw which seems like an obvious miss was the voice-activated security systems. Seventeen years later, we’re still waiting for that one. That seems to be a common prediction from the 1990s that never materialized; it turns out that pattern-recognition technology is much more difficult than most futurists thought. Also, I’ll give AT&T partial credit for the prediction about medical history cards which people carry in their wallets. Those are technically possible today, but they failed to consider the economic and political problems that prevent their common use in the United States.

I only count one and a half predictions that failed to manifest themselves, but what interests me even more is the biggest trend they missed entirely: cell phones. It’s quite amusing to see people video-conferencing on a pay phone. It is ironic that one of the top cell phone providers today completely missed the fact that mobile phones would become ubiquitous and pay phones would become obsolete.

Overall, I think these are incredibly prescient. Possibly the best set of predictions I’ve seen from this time period, although the commercials don’t really specify the date when these things would become widespread.

Saturday, June 5, 2010

The future of money - Virtual currencies?

Facebook seems poised to launch a virtual currency of its own sometime in the next few months. Twitter has flirted with the concept as well. Games like Second Life and World of Warcraft already have well-entrenched virtual currency systems which can be exchanged (with various degrees of legality) on the market for real currencies.

As we do more and more of our business online, it seems very likely that we will conduct more of our transactions in a currency other than the familiar dollars or euros. If a virtual currency became ubiquitous enough, we might even see real-world retailers accepting payments in these currencies.

This trend alarms me. As I see it, it poses some grave economic dangers not unlike the problems Greece is facing right now as it struggles under the weight of a currency over which it has no control. The Federal Reserve is kept in check by the President and the Senate, who appoint and confirm the board of governors, respectively. Thus, its incentives are largely in line with the public’s goals. But its effectiveness is only as strong as its ability to control the amount of money in our economy. If we adopted a virtual currency en masse, our monetary policy could be decided by a large corporation with no public accountability. I shudder to think of the economic ramifications; a corporation would not have the same incentives as the Federal Reserve. For example, it would have no reason to cut interest rates during a recession to fight unemployment.

It seems like a good idea for nations to tightly regulate any emerging virtual currencies, lest they find their own currency supplanted by corporate competition. One useful regulation would be to limit the use of virtual currencies to the company on which they originated. Want to use Facebook Credits? Fine, as long as you don’t use them anywhere other than on Facebook. Prefer Linden Dollars? Have fun, but don’t even think about spending them outside of Second Life. This restriction would prevent any virtual currency from becoming ubiquitous enough to challenge the supremacy of real-world currencies.

It is better to get started now to nip this in the bud before it grows large enough to become a serious economic threat. Ultimately, the future is what we make of it. Just because virtual currencies will likely become ubiquitous if left unregulated does not mean that no other alternatives are available.

Thursday, June 3, 2010

Response to Nassim Nicholas Taleb

I’ve had an interesting quasi-debate with Nassim Nicholas Taleb, with whom I often agree on many subjects. Last Friday, he tweeted:

@nntaleb: The best predictor of whether a technology will be used in 10 years is if it has been in use for 10 years.

I understand his basic point: Tried and true technologies are more likely to survive than fads of the day. But “the best predictor?” Really? As a contrarian and an aspiring futurist myself, I disputed Dr. Taleb’s point. I questioned if he truly believed, say, landline telephones would still be around in ten years. He followed up by posting this in his blog:

I wrote that a technology, book, cultural practice, religion, drug, opera piece, fashion, that is, all nonperishable cultural goods, are likely (in expectation) to last as long as they have been in existence. So when you observe a technology, you can expect it to be in the middle of its life. This note explains the math behind the point.

Note: This is an average across all technologies, a distribution, something probabilistic not deterministic: some fool of randomness wrote to me to wonder whether telephone land lines should be expected to last another century, another idiot tried to use my idea to compare Microsoft to Apple.This is a statistical framework for the dynamics of cultural uses.

Taleb expanded his initial assertion to a more general point that non-perishable goods could be statistically expected to be in the middle of their lifespan. Notice the italicized part (emphasis his). I’m the “fool of randomness” to whom he is referring.

Yet Taleb’s theory fails nearly any empirical test I can think of. There are plenty of examples of technologies which are almost certainly in their twilight (e.g. landline phones) and others which are probably closer to the beginning than the end of their lifespans (e.g. the World Wide Web). Given Taleb’s previous response to my inquiry about landline phones, I don’t think he would dispute this. In fact, he says “This is an average across all technologies, a distribution, something probabilistic not deterministic.”

But if this is the case, what good is the theory? I am racking my brain trying to think of any situation where it might be useful to know the average lifespan of all technologies (or books or companies), as opposed to the lifespan of a particular technology, but I am coming up blank. When we attempt to plan for the future, would it do us any good to know that the average technology can be expected to be around for, say, another 100 years? Of course not. We are only interested in specific technologies (or books or companies), and on that point, Dr. Taleb’s theory is nearly useless.

The things which we usually consider when evaluating the future of a technology are social, economic, and scientific trends: Upcoming technological replacements, the economic niche that the technology fills, how entrenched the technology is into the infrastructure of the modern world, and the advantages and disadvantages of the technology. The length of time it has existed should be, at most, an afterthought to these other criteria, because it is simply not an effective measurement. Taleb presumably does not believe that landline telephones will be around for another century. But the same variables which predict the premature demise of the landline phone are nearly always a better predictor of a technology’s future lifespan than Dr. Taleb's system.

Far from being the best predictor of a technology’s future lifespan, Taleb’s system is almost always far off the mark when it comes to measuring the lifespan of any specific technology. Technologies are not the stock market. The “average across all technologies” is a completely meaningless measurement. Far better measurements for the future lifespan of individual technologies exist.