radical Insights.

Weekly Research and Commentary on the Future of Business and Technology.

Checking in on Megatrends Mid-Decade.

Feb 6, 2024

For all the uncertainty inherent in forecasting trends in a complex world, there are things that remain refreshingly – and perhaps even reassuringly – consistent. I’ve pointed clients and readers before to a paper that futurist Leah Zaidi published in 2020~ arguing that only three trends truly matter for “future-proofing and innovating in a way that is coherent with the emerging reality.” Specifically, Zaidi pointed to (1) the impacts of a worsening climate crisis, (2) the rise of artificial intelligence, and (3) the struggle for an equal, just, and democratic society.

In a similar vein but with a slightly restricted focus on technologies, you’d have been hard pressed in 2020 to find a megatrends report anticipating the decade ahead that didn’t highlight both the development of increasingly powerful and pervasive AI tools and the accelerating energy transition / electrification of everything as critically important drivers of change and transformation. As we near the halfway point in the decade that Zaidi and other forecasters were envisioning, it’s hard to argue with their reading of these key megatrends – and fascinating to consider where and how each will progress from here.

Looking back, it’s clear that both the energy transition/electrification wave (driven by the collapsing costs of solar and energy storage) and the development and adoption of new AI systems (driven most recently by the explosion of LLMs) have proceeded more rapidly than even many of the more bullish forecasts of the early 2020s suggested. Looking forward, things are of course less clear – both in terms of the rates at which these twin revolutions will continue to unfold and the implications each will have for the world at large, but we do have useful approaches for exploring those questions.

One interesting angle is to consider them in terms of how each megatrend fuels processes of ~combinatorial innovation~ – simply put, the idea that innovation consists largely of making new & useful combinations of existing elements.

The electrification of everything is a big-picture systems transformation, sure, but it’s also a piecemeal process of combining organizations and institutions with new – and ever more accessible – energy possibilities. And in every case, we can fruitfully ask (1) how each organization or institution might be reimagined in a world of more stable and still-declining power prices and (2) at what point on the cost curves of energy and energy storage do radically different possibilities emerge for that organization or institution?

Thinking about the future impact of increasingly capable AI models through the lens of combinatorial innovation (which ~we’ve also discussed before~) provides a similarly – or perhaps even more – provocative vision. Here, too, we can fruitfully ask where/how new AI tools can be applied to existing processes, jobs-to-be-done, or customer needs to create innovative and even transformative solutions. Interestingly, even if the use cases might not always be as immediately clear here as they are for new energy technologies, the rate of adoption still promises to be much faster and the pressure to adopt, much greater simply because these new tools are all digital… and because they’ve shown some astounding function gains that even close observers have struggled to predict.

Consistent with the early forecasts, the energy and AI revolutions of the 2020s promise to be sweeping in their scope and impact. Both have progressed much more quickly than most analysts had predicted earlier in the decade, but in the next few years, it’s the latter that will move and make its impact felt much, much more rapidly. @Jeffrey