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Crystal ball gazing for 2013

Crystal ball gazing for 2013 Anthony Harrington

Penning my last blog for 2012, it seems natural to look ahead rather than behind. After all, who wants to sum up 2012 with its austerity, euro woes, China slowdown fears, and of course, that US fiscal cliff we were all stumbling towards at the end of 2012 as the US political establishment engages in its favorite game of dancing at the edge of the precipice?

In many ways 2013 already seems to be cast in stone. Pimco's Bill Gross and a number of other commentators have already pointed out that deleveraging in advanced markets is going to knock around 2% off GDP for, oh, about a decade to come. Since advanced markets were only ever going to achieve say 2-3% that means we're going to stay constantly in, at, or near recession territory for the foreseeable future.

No fun to be had, then, staring at GDP numbers. They are flat or down for as far ahead as most of us care to ponder. And then there's the demographic killer. The ratio of young to old in advanced economies is not getting any better, and after the age of 55, statistics show that people spend less, buy fewer new cars, downsize if they move home and so on. The post-55 lot are not much cop at keeping the economy driving forward, it seems - or at least, not as consumers.

So in structural terms, there is not much that gives grounds for optimism as we peer into the misty future. Or is there? How about technology?

The idea that technology will save us by producing some huge new growth motor out of the magic basket of things yet to be discovered is not a new one. It surfaces from time to time and people tend to either say: "Rubbish" loudly, or "Hmm, maybe," and there the discussion often ends. In my humble opinion, however, the point to grasp is that we are already on the road to massive change based on the technologies we already have in play. There are huge game changers making the transition from the lab to the real world, and it is worth keeping an eye on a few of them.

After all, no one saw the Internet coming, and it is now so interwoven in the fabric of business that it is impossible to disentangle and evaluate the internet's contribution to global GDP. We're still at the foothills of what connectivity might mean for the human race. Who knows, what we find along that road might yet cause us to end up chucking the whole notion of GDP as a yardstick of global health out the window - after all, GDP is about as flawed a yardstick as you're likely to find anywhere, so why stick with it?

If the internet was and is a game changer, what about, say, stem cell technology in particular and genomics in general? Watch for huge changes in the pharmaceutical sector along the lines of personalized medicine, some of which could well impact in 2013. And then there is robotics. What is happening in military in robotics is immense and is going to spill over into civilian life in a major way over the next ten years. It is unlikely that 2013 will see too much of this, other than in the hidden form of defense contracts to small, under-the-radar technology companies. It's more immediate public form will probably be an intensifying debate over the use of UAVs (unmanned aerial vehicles) by police forces, estate agents and of course the media (fancy a camera loaded onto a helicopter type drone peering down at you from ten feet over your head?).

But flying drones are only the tip of the robotic iceberg. University labs are on to robotics big time, and miniaturization is an obvious way for them to go (since it costs less to build small). Tiny scuttling things that do useful functions like planting seeds in swarms in fields, are one option. They can easily be transformed into super smart "pets" through the addition of a powerful CPU and a few gigs of memory. Add a cache about the size of a hand grenade and you have a potent anti personnel weapon, a highly mobile mine that could scuttle to within a few feet of its target then detonate itself. The mind boggles at the possibilities - and the horrors - that undoubtedly lie strewn about the path down this particular road. Blending massive computing power with huge strides in autonomous or remotely guided mechanical functioning is going to have a seismic impact on life as we know it.

How will it impact the economy? For good and ill. More automation means fewer jobs. Smart "dumb" robots will probably mean the end of whole swathes of jobs in the construction sector, for example. Ditto for factory workers and the list of jobs where machines can replace people will grow and grow. Bill Gross makes exactly this point in his latest client briefing:

“... workers are losing the race against the machine. Accountants, machinists, medical technicians, even software writers that write the software for “machines” are being displaced without up-scaled replacement jobs. Retrain, rehire into higher paying and value-added jobs? That may be the political myth of the modern era. There aren't enough of those jobs.”

It really is as blunt as that. Consider what drones are going to do to the military/terrorist confrontation. Drones are the poor man’s air force. You can have any number of them for the cost of a single ageing F16 fighter. Pack them with HE and fly them into anything you please. Iran is trying to turn itself into a nuclear power. Do we really think that copying US drone technology, or even reinventing it, is beyond them – and through them and others of their persuasion, beyond the reach of terrorists?

2013 is certain to simply extrapolate and build on many of the salient features of 2012, but it also has the potential for a whole bunch of surprises all of its own, not all of them pleasant...

Further reading on technology futures

Tags: China , fiscal cliff , genomics , internet , Pimco , robotics , technology , UAVs , unmanned aerial vehicles
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