Recent insights

During the summer holidays I read the book "Here comes everybody" by Clay Shirky. It contains many good examples about things that exist or happened in the world, with a perspective on some of the underlying mechanisms and structures. The power law distribution features prominently in many cases, for example the relationship between blogs and the number of readers (with this blog still very much being at the end of the long tail). The book also explains how social networking lower the barriers for group forming and collaboration, thereby fundamentally changing the need for corporate organizations to address certain problems that require joint effort.

It struck me that wealth and decision power at both national and company levels also seem to follow a power law distribution. With organizations organized in hierarchies, the number of people at the top is very small compared to the total. For countries, the number of people in power is very small too, and this seems to be consistent across both democracies and other types of systems like communism. Wondering why this is so, my theory is that this is due to natural selection: groups with few decision makers are more efficient. Other power distributions may have occurred in the past, but have been replaced by a more effective one.

I bought a Samsung Galaxy S last year, and this year they already introduced the Galaxy S II - my phone is obsolete. A similar thing happened to my brand new Samsung TV, so I got curious and found that this phenomenon is actually quite common: accelerated obsolescence. This is partly due to Moore's law, I also found a related phenomenon called "Android's law" which explains what's happening at a software level. I then wondered why these "laws" are the way the are, and today I found the work of Ray Kurzweil on TED who provides some explanation for the exponential curve - each advancement in technology is used to build the next - and also shows that Moore's law is but one manifestation of this principle. The Flip camera and netbooks are some examples of the consequences.

So what are the implications? To illustrate, here's a graph that shows the decline of human cognitive abilities with age.

Technological innovations happen at an ever increasing speed. What is new today may be gone tomorrow. As we get older, we humans increasingly have trouble to keep up with this cycle, leading to cognitive stress and a widening of the knowledge divide. This in turn may lead to social isolation of older generations, a problem which is becoming more prominent due to the aging population in most developed countries.

It also means that if you're a company producing products, a process in which it takes one year to develop a product may have been working fine some years ago, but it will no longer work in today's economy. Market windows for opportunities get shorter, so you need to be faster, engage with customers earlier, etc.