I’m going to disrupt the Silicon Valley script. You know the one. Every talk or article coming out of Silicon Valley follows the prescribed template: start with a dazzling description of awesome new digital technologies and then proceed to explore all the wonderful benefits and opportunities that these technologies will bring to us.
I’m going to do something different. I want to explore the dark side of these technologies. The side that very few tech evangelists want to acknowledge, much less talk about.
What do I mean? It’s the fact that all of these amazing digital technologies are coming together to create a world of mounting performance pressure for all of us, one where the performance pressure will continue to grow and expand on a global basis for the foreseeable future, rather than plateau and recede. Let me repeat: this pressure is not going away. Far from it. It will continue to intensify. If we make the mistake of standing still, we will fall farther and farther behind.
But that’s just the beginning. It’s not just that performance pressure is relentlessly growing for all of us. The combined impact of all of these technologies also accelerates the pace of change, making it more and more challenging for us to get to that next level of performance in a shorter and shorter period of time.
But there’s more. It wouldn’t be so bad if the pace of change was accelerating along some completely predictable path. These digital technologies are also increasing uncertainty – we are more and more vulnerable to extreme events, Taleb’s “black swans”, that come out of nowhere, gather enormous force very quickly through a global network of connections, and disrupt all of our carefully laid plans, our carefully compiled knowledge bases and our comfort levels.
Put it all together and it spells out a growing challenge. How do we keep up? How do we learn faster? How do we prepare ourselves for the cascades of unexpected events coming our way? How do we avoid mounting anxiety and the looming risk of marginalization and burn-out?
I don’t mean to deny the incredible benefits that all these technologies are bringing us. There’s a delicious paradox here: the very same technologies that bring us awesome opportunity and new possibilities are at the very same time bringing us mounting performance pressure, accelerating change and growing uncertainty. To truly harness these opportunities, we first need to acknowledge and deal with the dark side.
The Forces at Work
Digital technologies are coming together into global technology infrastructures that straddle the globe and reach an ever expanding portion of the population. In economic terms, these infrastructures systematically and substantially reduce barriers to entry and barriers to movement on a global scale. They make it far easier for any of us to reach anyone else around the world and to offer our goods and services wherever they might be needed. So, whatever position you have achieved today, watch out. There’s that person or company that you never heard of who is putting together a plan to take your customer away from you.
These infrastructures are also increasing the volume, variety and richness of connections. One effect of this is to accelerate the pace of change – information flows at a faster and faster pace to more and more nodes, making it possible for all of us to see things faster and to change our actions more quickly than ever before. As anyone who understands complexity theory knows, the more connected we become, the more vulnerable the system becomes to cascades of information and action that can disrupt the system in unexpected ways.
But here’s the kicker. This digital technology infrastructure is not stabilizing. We’ve had plenty of technology disruptions throughout history – the steam engine, electricity, the telephone, just to name some. But, as Carlotta Perez has shown, all of these disruptions followed a common pattern. They began with a burst of innovation at the technology level, but then quickly stabilized with only incremental performance improvements afterwards. That in turn led to a burst of innovation at the infrastructure level, figuring out how to most effectively organize and deliver the value of this technology to business and society. But then that too rapidly stabilized so we could then figure out how to most effectively harness this technology.
Our digital technology infrastructure is unprecedented in human history. It’s not stabilizing. The core technology components – computing, storage and bandwidth – are continuing to improve in price/performance at accelerating rates and the best scientists and technologists suggest that this exponential pace will not slow down in the foreseeable future.
And the power and scope of impact of these technologies is amplified by their interaction with each other and their ability to accelerate the performance improvement of an expanding array of other technologies, ranging from genomics to nanotechnology. Singularity University has led the way in exploring these technology advances and interactions and a recent working paper that I co-authored suggests that the biggest risk is to continue to view these technologies in isolated siloes.
So, whatever performance pressure, pace of change and uncertainty we’re experiencing today is just going to intensify in the years ahead as the infrastructures become ever more powerful. more diversified and accessible to more and more people.
Impact at Individual and Institutional Levels
To be clear, we experience this mounting performance pressure at both an individual and institutional level. At the individual level, one compelling indicator is a billboard that reads: “How does it feel to know that there are at least one million people around the world that can do your job?” The message is clear: no matter what your credentials or experience, you are increasingly competing with a lot of other smart and motivated people on a global scale and you can’t become complacent about your current position.
At an institutional level, the best indicator of mounting performance pressure is the analysis that we did in the Shift Index tracking the performance of all public companies in the US from 1965 to 2012. As measured in terms of return on assets, performance has plummeted – it has declined by over 75%. There is no sign of it leveling off and certainly no sign of it turning around. It’s not just that competitive intensity is increasing – it’s also about the increasing mismatch between the non-linear world emerging around us and the linear institutions, practices and mindsets we continue to hold on to.
Many executives are fond of comparing themselves to the Red Queen. You know the story: she ran faster and faster just to stay in the same place. But she actually had it pretty good – she ran faster and faster and managed to stay in the same place. We’re running faster and faster and falling farther and farther behind.
The Insidious Impact
All of this mounting pressure has an understandable but very dangerous consequence. It draws out and intensifies certain cognitive biases that I’ve written about elsewhere so I’ll just briefly summarize them here:
- They magnify our perception of risk and discount our perception of reward
- They shrink our time horizons
- They foster a more and more reactive approach to the world (one of the key reasons for the dysfunctional use of technology so graphically described in Sherry Turkle’s Alone Together)
- They lead us to adopt a zero sum view of the world – if you win, I will lose
- They erode our ability to trust anyone or any institution
As I’ve also written elsewhere, these cognitive biases also help to reinforce the masculine archetype. This is war and if you’re not macho enough to engage in battle, stand back and let the real men run the show. The feminine archetype is banished to the bedroom and the kitchen.
The combined effect of these cognitive biases increases the temptation to use these new digital infrastructures in a dysfunctional way: surveillance and control in all aspects of our economic, social and political life. Our corporate leaders embrace new technologies that offer the promise of being able to track worker activities and output in real time and in ever more fine grained detail. It also motivates employers to accelerate the process of automation: machines cost less to maintain and they’re far more predictable.
Ultimately, these cognitive biases significantly increase the likelihood of an economic, social and political backlash, driven by an unholy alliance between those who have power today and those who have achieved some modest degree of income and success. Both of these segments will feel profoundly threatened by these new technology infrastructures and deeply fearful of their impact in undermining their current position. Those in power will harness the growing fear and frustration of broader segments of the population that desperately want to hold on to the little that they have already accumulated.
Such a backlash would be a tragedy of global proportions. It would mean that our ability to tap into the incredible opportunity that these new technologies offer would come to an end. All of us as customers and as human beings have the opportunity to experience unparalleled and ever expanding well-being enabled by these technologies. But the backlash would push us back into our assigned roles and likely generate friction and war on a global scale that would significantly expand human suffering.
What is to be done?
Yikes! This is a pretty bleak picture I’m painting. Fasten your safety belt, this is going to be a very bumpy ride.
But I’m an optimist. What am I doing constructing such a bleak view of the world? Because I believe that, until we face the reality of what is happening around us, we will not take the steps necessary to harness these technologies to create a very different kind of world, one that turns pressure into opportunity and stress into success.
What are those steps? I’ll lay out an alternative, much more exciting, path in my next blog post but, for now, let’s just really absorb the dark side of technology – understand it, feel it, acknowledge it and confront it. It’s there. It won’t go away. If we truly embrace that, we’ll be more ready to take the difficult steps required to turn this all around.
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John Hagel leads a major research center in Silicon Valley and writes extensively on evolving forms of innovation. His most recent book is The Power of Pull, his personal blog is Edge Perspectives, and his Twitter handle is @jhagel.