Two Failures of the Technological Imagination

There are two related fallacies that technology analysts frequently fall into. The first is a failure to realize how much better nearly every aspect of technology needs to be. The second is a failure to realize that there are certain real-world factors that can get in the way of technological “disruption.”

The first fallacy is extremely pervasive and very annoying. To the extent that it encourages companies like Dell to underinvest in R&D it’s also damaging.

This sentiment is frequently seen in statements like, “computers are fast enough,” “smartphones are a mature category,” etc. Here is a Farhad Manjoo claiming that the iPhone is a “gadget that has maximized its potential.” People will also claim that people don’t need superfast broadband, or that cutting edge technologies are “overkill,” or that computers have been “fast enough for most people” for some years now.

It is especially ill-timed to claim that smartphones (any of them) have “maximized their potential” at a time when two of the most exciting innovations in smartphones–Google Now and Siri–are both new, and both so obviously in need of improvement. Siri is only spottily reliable, needs to be connected to the Internet at all times, and relies on distant servers, rather than local processing, even for voice analysis. It could stand to get much better and the ways in which it needs to get better are obvious.

Google Now is an even more ambitious idea than Apple’s updated ELIZA. Its goal seems to be to always already be doing what you want it to be doing. You look at your phone for directions and they’re already on screen. Your favorite team is playing and the score is already there. It’s a very cool idea but initial reviews say it has a way to go to reach its full mind-reading potential.

Today’s smartphones will seem unusable and laughably primitive in 10 years. Not only will new features like Siri and Google Now get better but entirely new kinds of things will be invented. And very few of them will be possible without boring continual improvements that might not impress the tech press but which are cumulatively more important than any number of exciting “new” things.

Of course not everyone should spend top-dollar on expensive technology before it’s ready for mass adoption. It might not make sense to have one link in a technological chain much more advanced than the others–you don’t need gigabit ethernet in the home when you’re only on DSL and don’t do a lot of in-home data transfers. And many of the people who fall into a version of this fallacy do qualify their statements and recognize that ordinary people will get these technologies someday. But this is only a recognition that inadequate technology is all that is practical at the moment. The notion that today’s technology is “good enough” in any respect for most people is nuts.

Even unimaginative, tick-tock increases in basic performance would yield huge results. Screens, even retina-level screens, are not as good as they should be. Touch responsiveness needs to be better. CPUs should be many times faster than they are today, or massively more parallel. Your PC or smartphone would easily benefit from having, say, a terabyte or two of RAM. These sorts of basic horsepower improvements allow for the software innovations that make people ooh and ah. Levels of computational performance that were once relegated to supercomputers and workstations have become necessary for all sorts of consumer-facing features–and the level of performance that is today limited to the Top 500 list will one day be harnessed for video games and cat pictures. Just wait. Facial recognition in iPhoto and Picasa is an example of the kind of thing that computers would not have been capable of doing if they stopped getting faster when people started saying they were fast enough. Every major consumer operating system now uses accelerated 3D graphics in ways that geeks first called trivial eye candy but which now yield obvious improvements to computers’ ease-of-use and friendliness. Even the speed much web-browsing is limited by CPU speeds more than network speeds–note how a laptop that is tethered to your smartphone’s data connection will often be much faster at loading web pages.

I’m not going to bother explaining how online video, communication, and cloud services would benefit from faster networking. They would. If this sort of thing bothers you as well listen to John Siracusa’s podcast, Hypercritical. He has discussed this idea on the show and is the master of explaining how today’s technology all sucks.

The second fallacy is the opposite of the first. It’s the fallacy that since technology keeps getting better and various industries keep getting disrupted, there’s no need to worry about things like broadband monopolies and wireless duopolies. (I have written about how the video market is harder to disrupt than some suppose due to regulatory problems and entrenched business interests.)

I think there are two elements to this fallacy. The first is an emphasis on static efficiencies in markets like broadband with high fixed and low marginal costs, and a deemphasis on dynamic efficiencies in those markets. Adam Thierer calls people like me proponents of “lemonade stand economics” as if we think that there ought to be dozens or hundreds of operators in access markets. However, the evidence suggests that those markets with even a little more competition than in the US–4 or 5 large national mobile carriers instead of 2, for example–yield better consumer outcomes. Also, this mode of analysis overlooks wholesale/retail divisions (whether they are voluntary, like with MVNOs, or involuntary structural separation rules) that, done right, can allow for scale efficiencies and price and service competition.

The second part of the fallacy is that there’s no need to worry about monopoly abuses because an abusive monopolist will make itself vulnerable to upstart competition, and that in any event markets change so quickly that there’s no reason to worry about any problems because they’re just going to be transitory anyway.

I actually agree that this is true about many technology markets. Social networks, search engines, and gadget companies might seem invulnerable at any one time but recent tech history is a procession of fallen giants.

But what exactly is the competitive threat to fiber, cable, or the wireless companies? What new entrant is going to challenge them? In most places it’s about as sane to build multiple overlapping fiber networks as it is to build multiple competitive sewer pipes. And the FCC is unlikely to take wireless licenses away from Verizon and give them to Sonic.net if Verizon’s consumers get mad–meaning that the threat of new competition is not enough to keep Verizon in check. (Verizon and AT&T do snipe at each other but they have adopted very similar business models–actors in concentrated markets often find it best to operate in parallel.) White spaces, incentive auctions, and so forth are only nibbling at the edges of the spectrum problem.

Coaxial cable, fiber, and radio spectrum are basically it for broadband. All of these technologies are going to get better, of course, but the need to lay down cables or access spectrum is not going to go away. Insurmountable regulatory and economic barriers stand in the way of new competitors that would use existing technology. It’s not enough to have a good idea. You need a good idea and a time machine if you want to be a broadband provider.

If you want there to be more broadband competition there needs to be some sort of government action, even if that action is categorized as “deregulatory.” And if the government doesn’t take those actions then we’re stuck with monopoly and duopoly providers that have few constraints, with customers that have few options.

It is illegitimate to look at Apple disrupting the handset industry or Facebook disrupting Google in contestable markets and assume that some Apple or Facebook of broadband is going to come in and disrupt today’s ISPs. The fact that these are all “high tech” markets doesn’t mean they’re alike in relevant ways. Just as it betrays a lack of imagination and optimism to fail to think of the ways that the technology around us can get better, it betrays a blind faith in technology to assume that competitive problems in certain markets are going to be swept away by the ineluctable tide of disruption.