2011: The Year in Review

As we close out 2011, in many ways the world looks very different than it did a year ago. From political upheavals in the Middle East, a cooling economy in China, an ongoing debt crisis in Europe, and the deaths of several of the world's most odious characters, the world has not seen such a transformative year since the end of the Cold War in 1991. Although we could have seen glimmers of all of these things a year ago, most of these changes were difficult to predict. My friend Nassim Nicholas Taleb might call them “Black Swan Events.”

Since this blog is primarily about futurism, I feel that I should go back and examine the predictions I have made for 2011 to hold myself accountable. With some predictions it is not always obvious whether they are correct or incorrect. Furthermore, self-evaluations tend to be a bit biased, and some futurists have the unfortunate tendency to go to absurd contortions to avoid admitting mistakes. In this post I will try my best to avoid that, but will rely on my readers to keep me honest.

By 2011 – Near-field communication comes equipped in many new smartphones. Mobile payments become even more popular in the developing world, and makes inroads in Europe and the United States. (Jan. 2011)

Mostly correct

As of the end of 2011, some of the most prominent smartphones come with NFC chips, including Samsung's Galaxy series, Google's Nexus series, and Blackberry's Bold series, although in some cases the NFC chip is an add-on rather than a standard feature of the phone. Conspicuously absent from this list is Apple's iPhone, which does not yet have NFC. In September 2011, Google released Google Wallet, a mobile payment application for smartphones which uses near-field communication. As of now it is only available on Google's Nexus S phone, although Google is working with handset manufacturers to incorporate Google Wallet into other Android phones.

This year also marked the growth of Fundamo, a mobile payment system that now operates in over 40 developing countries, and its subsequent acquisition by Visa. The mobile payment industry is somewhat unusual in that the developing world is actually far ahead of developed countries on this technology.

In Europe and the US, progress has been more slow than I anticipated on the mobile payment front, although as I stated last year, we would only be seeing the first glimpses of it in 2011, rather than its widespread adoption. One of the pioneers of this in the US has been Starbucks. The coffee chain has ported Starbucks cards onto Apple and Blackberry smartphones, and customers are able to pay their bill simply by swiping their phone over a scanner. Look for similar technologies to pop up in other businesses in 2012, although I still think it will be a couple more years before it goes mainstream in the United States.

By 2011 – Internet-equipped televisions or add-ons will become popular. (Jan. 2011)

Mostly wrong

I'm going to count this one as a miss. Although internet-equipped televisions and add-ons are commercially available, they are by no means popular yet. Google TV proved to be a very expensive flop for Google, with many cable companies explicitly blocking their web content from playing on Google TV. The biggest barrier to widespread adoption of smart televisions is no longer technological, it is economic. Unless laws are enacted to prevent content providers from discriminating against platforms like Google TV, we may be waiting for several years before economic circumstances will cause the content providers to relent.

Some of the smaller add-ons, such as Boxee and Roku, have proven much more commercially successful than smart televisions have. However, they are much more limited in what they can do.

By 2011 – At least 75% of countries improve their score on the Human Development Index compared to 2010, with the biggest improvements in developing countries. (Jan. 2011)

Correct

Although you would never know it from media reports, 2011 was a year of widespread economic success nearly everywhere in the world. My prediction that at least 75% of countries would be better off was actually quite conservative. 93% of countries improved their level of human wellbeing, as measured by the Human Development Index. The biggest winner of the year was Ghana, one of Africa's best-governed nations. The biggest loser was war-torn Libya. Of the 183 countries evaluated, 171 improved their wellbeing, 6 spent the year treading water, and another 6 lost ground. These unlucky countries were mostly located where you would expect them to be: debt-ravaged Europe and the turbulent Greater Middle East. Nearly everywhere else, people ended the year better off than they started.

By 2011 – There will be a major shakeup (or a total implosion) in the top leadership of North Korea and/or Iran. (Jan. 2011)

Mostly correct

The “and/or” is what made this prediction correct. I thought this was going to be a miss, but with two weeks to spare before the end of the year, Kim Jong-il of North Korea did me (and the rest of the world) a favor by dying. At this point it's too soon to speculate how North Korea's government will change following the leader's death. His heir, Kim Jong-un, is unlikely to be able to wield total power like his father.

Surprisingly, Iran has been relatively stable this year. With all the simmering anger in Iran following the aborted 2009 election protests, it seemed likely that Iran would emulate its Arab neighbors in protesting its government. Iran's supreme leader, Ali Khamenei, reportedly has terminal leukemia, but there does not seem to have been any major leadership changes despite a year of palace intrigue. President Mahmoud Ahmadinejad spent much of the spring boycotting his official duties amidst a very ugly public spat with the Supreme Leader, who clearly does not trust Ahmadinejad any longer.

By 2011 – Tablet computers account for at least 13% of the US personal computer market. The market will become competitive with several new tablets seriously challenging Apple’s iPad. (Jan. 2011)

Somewhat

The first sentence is undeniably correct; the most recent estimates I can find for 2011 indicate that tablets accounted for about 17% of the PC market this year.

The tablet market is certainly more competitive now than it was a year ago, but most of the Android tablets continue to disappoint. The sole exception is Amazon's Kindle Fire, which has been an instant hit. It doesn't exactly “challenge Apple's iPad” as I predicted, because the two tablets are aimed at very different markets: the Kindle Fire is priced at $199, whereas even the cheapest iPad will cost $499.

By 2011 – Gaming (led by Microsoft’s Xbox Kinect) will begin to become gesture-based, rather than controller-based. (Jan. 2011)

Correct

Many games have been created for Xbox Kinect which rely exclusively on gestures. This technology is especially useful for exercise and sports-related games. Look for it to continue to expand in the coming years.

By 2011 – The migration of computer files from the hard drive to the cloud will begin in earnest, as people become more willing to allow third-parties to store all of the content on their computers via the internet. (Jan. 2011)

Correct

The big winners of the race to the cloud are Amazon, Verizon (Terremark), and IBM. The file hosting service Dropbox, which enables consumers to store their files in Amazon's cloud and easily work with files on multiple computers, has been one of the year's blockbuster startups. Some estimates indicate that it now has over 50 million users.

By 2011 – Voice Over IP services, such as Skype, become popular on smartphones, thus portending the eventual demise of traditional voice-telephone services. (Jan. 2011)

Wrong

Voice Over IP services have not yet caught on on smartphones. I think my error in this prediction was that I underestimated the difficulty of using Voice Over IP on 3G smartphones (I confess that I hadn't actually tried it on my own 3G phone at the time I wrote this prediction). 3G phones tend to be too slow to get good reception on an internet call, resulting in garbled and spotty transmission. Even people with 4G phones will be hindered unless the person they are calling also uses a 4G phone (or their computer). Until 4G smartphones become ubiquitous - which should happen within the next few years - traditional voice telephony will probably remain the dominant method of making calls.

By 2011 – At least one company offers genome sequencing for $1,000 or less (Jul. 2010)

Mostly wrong

I thought that attaching a specific dollar figure to this prediction would make it easy to evaluate and leave little room for interpretation, but I overlooked the fact that there are different kinds of genome sequencing. The price point is different, depending on how thorough one wants the analysis to be. At the lower end of the spectrum, Google-affiliated startup 23AndMe offers basic genotyping for $159, which includes a DNA analysis of a person's ancestry and their likelihood of acquiring various diseases with a clear genetic component. However, this service is not very robust. “Full genome sequencing” is considerably more expensive. The leading company for full genome sequencing, Illumina Technologies, currently charges $5,000 (or $4,000 for bulk orders). This is a price cut of more than 50% since this time last year, but we'll have to wait a while longer for the elusive $1,000 genome.

By my count, that's 5 correct or mostly correct, 1 somewhat correct, and 3 wrong or mostly wrong. I think that's a decent record, and it will be the benchmark I try to beat for my 2012 predictions, which I will be posting in the next few days. I am also interested to hear from my readers if I was too easy or harsh in grading my own predictions. Do you think I erred in any of my self-evaluations of my predictions? If so, which ones and why?

Black Swan Events: Bioterrorism

The Genomic Revolution is a double-edged sword. As I mentioned previously, the benefits will be enormous. Genomics will allow us to have personalized, preventative health care, instead of mass-market sick care. However, there is also a ghastly dark side to the Genomic Revolution. We will soon face the truly horrifying prospect of bioterror (or bioerror.) When any college student has access to pathogens and the capability to modify them to make them even more virulent or transmissible, someone almost certainly will.

Within a few years, the genomes of nearly all human pathogens will be publicly available. This will be necessary in order to better understand these diseases and develop cures. However, those who wish to use this information to commit acts of mass murder will have access to it as well. Some diseases may not require very much modification to become even more deadly. The 1918 Spanish flu pandemic, which killed more people than World War I, is very genetically similar to many of the strains of flu that are still circulating to this day. Soon it will be possible for an individual to create a virulent flu strain like the Spanish flu by genetically modifying other strains.

Since genomics is essentially an information technology, it is possible to swap genes from one species into another. This is what allows agronomists to copy the cold-resistant genes of Arctic fish and paste them into tomatoes (in theory.) However, the same principle could be used by bioterrorists to create a Frankenstein’s monster, combining the worst traits of many diseases. Imagine an illness with the virulence of ebola, the transmissibility of the common cold, and the evolutionary adaptability of HIV. Such a disease is the stuff that nightmares (or B-movies) are made of. Yet it will eventually be possible for malevolent individuals or groups to create them.

If a manmade disease was sufficiently different from anything found in nature, it could prove devastating. We humans have had a chance to evolve alongside influenza, the plague, malaria, and other naturally-occurring afflictions. People alive today are mostly descended from the hearty individuals who survived earlier strains of these diseases. But we would not have evolved such immunities to manmade diseases. Just as the vast majority of Native Americans were decimated by European diseases to which they had no immunity in the 16th century, we could face the same prospect with manmade superplagues.

Fortunately, we have a defensive weapon in our arsenal that the 16th century Native Americans did not have. Just as genomics can create such frightening diseases, it holds the potential to cure them. Within a few years, it will be possible to sequence a genome in a couple hours. As our understanding of how genes work continues to grow, it will take less and less time to understand the genomes we sequence. Assuming that bureaucratic procedures were waived to combat a public health emergency, a cure for a manmade disease could be on the market almost as quickly as software antivirus programs are patched when new threats are discovered. Soon, naturally-occurring diseases could be a mere minor annoyance. The real public health danger could shift to the arms race between bioterrorists and scientists racing to cure their latest concoctions.

BLACK SWAN EVENTS:

By 2040 – A disease created or modified by humans has been released into the public. Probability: 90%

By 2040 – A disease created or modified by humans has killed at least 100,000 people. Probability: 75%

(I hesitated to even call bioterrorism a “Black Swan,” since that implies that the event is at least somewhat unlikely to occur. In my opinion, the danger of manmade diseases being released onto the public is not a question of if, but when and where. Since we cannot forecast this, it is unpredictable enough to be considered a Black Swan Event in my opinion.)

Black Swan Events: Nuclear War and Nuclear Terrorism

In my new Black Swan series of blog posts, I will be looking at a few of the potential surprises that history could have in store for us. Nassim Nicholas Taleb defines a Black Swan as an event that is very difficult to predict in advance, but radically changes the course of history. Some examples in the last 50 years include 9/11, the sudden collapse of communism and the end of the Cold War, the AIDS pandemic, and the invention of the birth control pill. It would have been very difficult for a futurist to predict any of those events in advance based on trends, and yet they have had a very large impact on the world. A Black Swan Event could throw a wrench into predictions for the future, which tend to be based on analyzing trends rather than anticipating surprises.

All of the predictions I have made about the future of technology, especially those in the more distant future, should have the following disclaimer: “Provided that we do not destroy ourselves.” Today I’ll be examining a Black Swan event that has been hanging over humanity like a Sword of Damocles for 65 years. A nuclear war has been widely viewed as the ultimate catastrophe. Very few things could set back the progress we have made in improving the quality of life in the past two centuries more than a nuclear war could. Where is the greatest threat of a nuclear war, and where is the greatest potential for destruction? Could a sovereign nation launch a nuclear first-strike against its foes, or are nuclear-armed terrorists the greater threat?

Let’s first examine the potential sources of an international nuclear war. While less likely than a nuclear terrorist attack, it has far more destructive capability. I think there are three main global flash points to consider: India-Pakistan, North Korea-United States, and Israel-Iran.

As with any Black Swan Events, we need to evaluate scenarios based upon both their likelihood and their destructive potential. The India-Pakistan flash point is very high on both measures, making it of supreme importance. This region has the greatest potential for an international nuclear war in my opinion. The two foes have 60-80 nuclear weapons each, and neither seems to have many qualms about nuclear brinkmanship. The extreme population density in this part of the world means that even a single nuclear volley could have enormous destructive potential. Despite (or perhaps because of) the instability of the Pakistani government, the two nations remain as suspicious of each other as ever.

North Korea is another source of a potential nuclear war. The nation makes a habit of antagonizing nearly every other country in the world, projecting an irrational image, and seems to perpetually be on the verge of either a power transfer or total collapse. In my opinion, the greater danger is an accidental nuclear launch against South Korea or Japan, rather than a directive from North Korea’s leadership. Little is known about North Korea’s nuclear weaponry, but it is unlikely that such an impoverished nation has adequate safeguards in place to prevent a Dr. Strangelove-style strike ordered by a rogue commander. If a North Korean weapon was used on South Korea or Japan, the United States would almost certainly respond with nuclear force of its own.

Another potential source of international conflict is between Israel and Iran. If Iran eventually gains nuclear weapons (as I think it will), either Iran or Israel may be tempted to strike the other first to solidify its position as the preeminent nuclear power in the Middle East. However, in my opinion conflict is unlikely, because neither Israel nor Iran would truly gain much from a nuclear exchange. It is far more likely that the two nations would come to an uneasy truce than fight a nuclear war.

But the greater danger comes from nuclear terrorism, rather than nuclear war. While far less destructive, it is also far more likely. Warren Buffett stated in 2002 that he believed an eventual nuclear attack on US soil was a “virtual certainty.” While I am not quite that pessimistic, it is hardly unthinkable.

Where could terrorists obtain nuclear weapons? Three nuclear powers – Russia, Pakistan, and North Korea – have had difficulty maintaining control of their stockpile, thus allowing the possibility of a nuclear black market. When the Soviet Union collapsed, the nuclear material was spread amongst four nations (Russia, Kazakhstan, the Ukraine, and Belarus). A small amount of it has never been accounted for. It may still be changing hands on the black market. North Korea and Pakistan pose even greater threats. North Korea may be on the verge of total state collapse. If the nation collapses and the neighboring powers do not take immediate action to secure its nuclear supplies, it is plausible that terrorists could eventually gain access to this material. The Pakistani government is increasingly unstable, and many elements of the military are sympathetic to terrorist groups. Many parts of the nation are not controlled by the central government. Furthermore, Pakistani nuclear officials under A.Q. Khan have a history of selling nuclear material on the black market.

While the end of the Cold War greatly reduced the threat of a nuclear conflict, the trend has now reversed as nuclear weapons continue to proliferate, especially in unstable regimes. The use of nuclear weapons is becoming more likely with each passing year. While I doubt that any terrorist groups have access to nuclear weapons yet, I think the day is coming in the near future unless the world takes immediate action to reverse the trend.

BLACK SWAN EVENTS:
A nuclear weapon is detonated in a major world city by 2030 – Probability: 50%
A nuclear war (defined as a nuclear attack and counterattack) occurs by 2030 – Probability: 30%

Black Swans

When predictions about the future are incorrect, it is often because the predictor assumed that history wouldn’t provide us with any surprises, which it almost invariably does. Nassim Nicholas Taleb refers to these events as black swans. It is extremely difficult to predict them in advance, but they have a drastic impact on world history. Examples include 9/11, the AIDS pandemic, the Islamic Revolution in Iran, the invention of nuclear weapons, the stock market crash of 1929, the 1918 Spanish Flu pandemic, or the outbreak of World War I.

You may notice that most of the events on this list are widely considered to be disasters. As Warren Buffett has said, “Surprises are nearly always bad.” However, this isn’t universally true. There are, on rare occasions, examples of positive black swan events.

For example, in 1968 Paul Ehrlich wrote The Population Bomb, which predicted a nightmarish future of overpopulation and mass famine. Ehrlich looked at the global population trends from recent decades and saw that people were reproducing at an alarmingly fast rate. Yet within just a few years of the book’s publication, global birth rates began to decline and the global food supply increased exponentially. Ehrlich completely missed two very important “positive” black swans: The widespread adoption of the birth control pill and the Green Revolution in India.

The purpose of thinking about potential black swan events is to plan for events that are individually unlikely to occur, but would have a profound impact on the world if they do. I’ve thought of a few black swan events to think about for the next decade:

• A nuclear war between India and Pakistan
• The democratization or fragmentation of China
• Ecological collapse, followed or preceded by abrupt climate change
• Bioterror or bioerror releases a manmade super-plague
• The invention of effective anti-aging medicine offers indefinite lifespans
• The assassination of a major world leader
• An especially nasty strain of avian or swine flu results in a global pandemic
• An American state votes to secede from the union
• A global financial collapse

Depressing, huh? I tend to agree with Buffett that surprises tend to be bad (with some exceptions). Positive events tend to be much more incremental and predictable than negative events. You may believe the events on my list are all unlikely to occur in the next decade, as I do, but that’s the whole point. We must anticipate unlikely events and make contingency plans in case they occur. Life's surprises can be just as important as its long-term trends.

What do you think are some other black swan events that could conceivably occur in the next decade?

50 Years of Questions

This is a video I made a couple months ago, entitled "50 Years of Questions." It's my vision for what the world might look like in the future, as well as a look back at how far we've come in the last decade.

Note that I just think these are QUESTIONS people might be asking themselves around this time. I'm not necessarily suggesting that we'll know the answers to all of them by the dates I listed.