Seven Rules for Predicting the Future

Entrails. Most sayers of sooth in the ancient world swore by them as a means to determine the future - take a sacrificial bull or sheep, gut it, cast the entrails on a stone to determine how the future looked, then toss the entrails into the fire for the gods to consume to gain favor? Why? Because having sacrificed that particular piece of said animals, you still had all the rest of the animal to eat, which generally tasted much better anyway. No one ever said that futurists were stupid.

In reality, being a professional soothsayer (or it's modern day equivalent, the business or technical analyst), typically comes down to understanding how to understand trends and patterns, and then to determine the degree to which a given entity - whether a person or an institution or a stock pick - fits those patterns. It is impossible to say tomorrow who will win the lottery, but you can make a pretty good bet about the likelihood of a person or an institution winning the lottery based upon their behaviors and how they fit profiles.

One good question to ask is why you would want to become a soothsayer. Besides the obvious potential for cocktail party talk, there's actually several compelling business reasons to become proficient in looking through the glass darkly. Barring unfortunate circumstance, you'll be living there eventually. If you can understand what the trends are that are shaping your business and your life, you can also move from riding the waves to directing them (at least to a certain extent). Nearly every business decision that you will ever make is ultimately a guess about the future - will this make us money? will this person help in our core mission? what product lines should we be expanding into? How do I keep my company relevant five years from now?

So, while there's some occasional deep math that can help in detecting and ascertaining these trends, there are also a few patterns - or rules - that can make making accurate predictions easier .

#1. Exponentials

The world changes almost imperceptibly in ten years, and almost unrecognizably in twenty

Moore's Law, first formulated by Gordon Moore (at the time at Fairchild, later cofounding Intel) states in its most currently recognized form that the power of technology will increase by a factor of two every two years or so., Originally this applied just to transistors (which by themselves have reached a limit), but if you look at general computing power, this still holds true. This means in five iterations, computational power improves by a factor of two to the fifth power, or thirty times. Faster, admittedly, but not astoundingly so. However, in ten iterations (or twenty years), technology actually increases in power by a factor of 1000 (give or take).

To put that into perspective, if it took you a year to write a book in 1995 and you had that increase in your own computational power, it would take you about eight hours to write that book today, twenty years later.

Moreover, it takes between fifteen and twenty years from the development of an innovative technology to get to the point where that technology has been productized and has become mainstream, usually with significant improvements along the way. There is also an add-on effect - as innovations make their way into specialized usage, they often spawn further innovations downstream, sometimes related to the initial innovation, sometimes seemingly quite divergent.

Put this into perspective. The web got its start with two servers in 1990. It went through an explosive period of growth into 1999, then the tech sector crashed hard. E-commerce was the big buzzword in 2000, but in reality most of it was hype. It would take another ten years to get to the stage where the web was pervasive and actually not really of that much interest. It had become mainstream, but its also worth noting that e-commerce platforms are now very clearly established and is used daily by millions of companies world wide. We're now entering the stage where these technologies are changing society, not simply existing for their own sake. What's helped is the radical improvement in process power over the course of two decades.

#2. Nothing increases forever

Now, there's a big caveat here. The laws of physics will always provide an upper limit to how much any one given process can be optimized. You can only fit so many processors on a chip. You can improve materials engineering, you can create better fabs, you can even innovate on how you store information at the atomic level, but eventually the cost of making improvements rises to a point where it is no longer either physically or (more significantly from a business standpoint) economically feasible to improve something. That's why most technologies actually follow a pattern called a logistics curve.

The logistics curve is a formal mathematical way of what's often known more informally as "the Law of Diminishing Returns", and it appears all over the place in analysis. One way of thinking about it is that once you make the initial breakthrough, the cost of recreating one or even a hundred of something drops very dramatically, and so you get a lot of bang for your buck. This gives you the appearance of exponential growth. Money is a proxy for energy in this case (something to remember always - the logistics curve is fundamentally an energy curve).

Eventually, however, you reach a point where you have optimized doing all of the easy things, and now are having to optimize the harder things, typically dealing with the limits of size, or energy consumption or cost. For chips, the limiting factor was that at a certain point, you can make wires and wave guides no tinier than a certain multiple of the "size" of an electron before heat from these electrons due to ambient electrical fields would destroy the transistors. We are actually past this point now - most of the improvements in performance have come from other optimizations, but even there the pace of innovation is slowing and the cost of putting together fabrication plants is becoming unwieldy.

This doesn't rule out different forms of electronics processing - using the spin of an electron, for instance, or using light (photonic computing) or quantum superpositios (quantum computing), but these are on their own logistics trajectories.

This holds for far more than just technology. Businesses will not grow indefinitely, but will grow only until they reach an equilibrium with the rest of the business environment. Product adoption follows the same kinds of curves, which means that a hot new band, or a gotta have product, will reach a saturation point in adoption that may seem meteoric at first, but it will eventually become mainstream. Knowing where something is on that curve and its history can then be a good gauge for understanding what it's likely growth is going to end up being.

#3. The Future is (Mostly) Linear

The simplest form of predicting the future is by taking points from the past, and drawing a line that extrapolates that future. What's astonishing is that it actually works surprisingly well. Most trends, once underway, exhibit the same behavior over a sufficiently short time line.

On March 21st, 2014, there were a number of houses sitting on or nearby one of the many hills in Oso in western Washington State. On March 22nd, there was a mile wide swath of mud that had swallowed most of those houses and claimed forty three lives. That mudslide had been triggered by heavy rains in the weeks before, but if you had asked the people who survived if the hills would have been there the day before, they would have thought you weird for asking.

Most systems, whether something as simple as a hill made out of sand and rock particles to something as complex as an economy, there are constant stresses that buffet that system. Most times the system survives, but in the process something fractures, perhaps a little, perhaps a lot. At times when things appear stable, people become complacent and start taking bigger risks that don't always pan out, and rather than deal with the resulting problems these problems get papered over. Corruption rises as personal political feifdoms build (in business and government), Planning for emergencies takes second place to meeting sales figures. Each of these weakens the system, little by little,

Economist John Mauldin popularized the term "Fingers of Instability" to describe these cracks, faults and weak points. In a few cases, these tend to heal spontaneously, or remain isolated, but in most situations these cracks begin to join up and build longer cracks, much like unmaintained asphaslt.

Normally such fingers tend to be small and relatively disconnected, but eventually they join up with others, which join up with still others until you have a crack that extends from one edge to the other of the system's domain.

What happens next depends somewhat upon the system, but from a Chaos Theory standpoint they all describe the same thing: a mathematical catastophe. The energy in the system is insufficient to hold together when some outside stimumus (such as a rain storm, or an investment bank getting caught in a bad margin call), hits it.The energy of that stimulus travels across the network of cracks, and a portion of the asphalt splits off, the waters saturated slopes of a hill begin to overcome gravity, the scrample of the stricken bank to call in its own debt forces similar crises elsewhere and a bank run occurs as investors try to get their money out of the banks before they collapse.

Economist Nassim Nicholas Taleb describes such events as black swans, after the discovery by biologists of black swans in Australia that seemed to break the dictum that "All Swans Are White" They seemingly appear out of nowhere, but when you dig deep enough, you realize that the only thing that couldn't have been predicted was the precise timing of the event ahead of time.

A good analyst should be looking for places where these fingers of instability may be growing. In many cases the signs are there - regulatory irregularities, sales numbers systematically missing projections, smaller, seemingly disconnected events that nontheless seem to be clustering in specific industries,

This means that an analyst's best tool is not a piece of software or a professional service - it is taking the time as part of their daily routine to do research across different areas to better identify when those particularly pesky birds will show up (along with their favorite food, storm causing butterflies).

#4. Watch the Young

In ten to fifteen years time, broadcast TV (broadcast and cable) will be toast. Why do I say this? Because I watch my teenage daughters stream movies and shows off their drives or media servers and share it with friends directly through the stream, complete with running feeds of commentary, flashed Facebook posts and secondary video cams. The things they're watching? Kickstarter based video productions or games, Japanese anime, ancient (by their lights) cartoons, and web comics and popular ebooks, youtube commentaries and, surprisingly enough, science documentaries. However, don't get so hung up on that - the interests will evolve over time, but what will remain the same is the diverse, eclectic, and above all electronic nature of the media, especially if they can change it.

They've become adept at capturing video streams and editing out the commercials (often replacing them with their own satirical ones that are far better than what the ad industry produces). They're schedule meetups involving dozens of people coming together dressed up as Homestuck characters or the personifications of game characters (look for The Legend of Zelda to make a resurgence), and they are starting up their own stores on Etsy and Pinterest to promote their interests (primarily to pay for the game consoles or getting to the meets).

Oh, and a majority of the ones that are doing this are girls.

The future is written by the young. The last two to three years have seen a watershed event happen with breathtaking speed. A solid majority of the country now allows same-sex marriage to take place. This has happened ironically in spite of the gay community, which has been advocating for this right for decades without a lot of success. It has in fact happened because the vast majority of people in their early twenties simply do not understand why same-sex marriage isn't a right, and they are taking to social media to make it happen .... regardless of what their own sexual orientation is.

The trick in understanding what the young are signalling is not to look at what they are saying but how they are saying it, how they are entering into business (or not), how they entertain themselves and how they communicate. This will be norm in a decade or so. There is an ettiquette developing in how those ten years old and above communicate with their peers - text messaging trumps voice communication hands down, asynchronous trumps synchronous, producing trumps consuming. Therse are people who judge themselves not by the other students in their class, but by artists, writers, videographers and game designers worldwide (take a look at DeviantArt some time). They are experts at deconstruction of tropes within media, and despise commercials ... but give them the ability to "play" with those commercials (build stories and characters that they can incorporate into their media narrative stream) and you can create a viral ad campaign that will gain a life of its own.

This is where culture is heading by 2025. The role of the futurist is then to take this seed material and write "science fiction" stories. Specifically, given these characteristics, what happens when these "kids" become enmeshed in careers, start a family, become politically active, start businesses of their own. How will they interact with the technology that is in the prototype stage today? How will their social values change? Too many people when looking at the future get hung up on the technology, without looking at the fact that the technology is always subordinate to the social needs.

#5. Energy Drives Everything - Understand Megatrends

If you want to get a feel for how international finance and economic trends will evolve, spend some time focusing on the energy sector, both old (oil, coal, nuclear) and new (solar, wind, thermal gradient and the electric infrastructure that these can provide). High finance evolved largely to deal with the huge sums necessary to provide investment for, purchase, transform and ship petroleum products. Credit, in this view, can be seen as being a lien on future energy supplies. This isn't wholly true, credit is more properly a lien on any physical resource, but energy is a big component there, and the one that tends to have the most dominant effect upon the global economy.

We're in the midst of a major transformation in our economy, as more resources are being devoted to creating alternative energy sources. While these still represent a very small proportion of the overall energy powering the economy, their effects are being felt, and a significant portion of R&D is taking place in this particular sector. This is also having a disruptive effect upon the existing hydrocarbon sector, is affecting politics, and is having impacts in the shipping and transportation sectors, manufacturing, housing and to a certain extent IT.

There are specific megatrends to watch as well - the rise of 3D printing is a huge one, especially in the areas of biomedical prosthetics and similar fields where ordinary mass production is inefficient, the Internet of Things (which is largely a question of standardization of protocols rather than specific changes in manufacturing) and the introduction of homo robotics, the graying of the world's population, and so forth. Most of these are "baked in" at this point - it's not a question of whether they will happen but only about how they will end.

#6. Beware Flying Cars

The flying car and the jet backpack have been staples of futurists since the early part of the last century, and yet for all that they never seem to get off the ground. The reason for this is simple - flying cars would be a logistical nightmare to manage, while flying backpacks have a bad tendency to set your butt on fire. However, this points to a deeper issue that people predicting the future should always keep in mind.

The future builds on the past. Always. Can you build a flying car? Sure - we've actually had them for years. They're called helicopters. Helicopters usually have special pads near airports because such places are typically free from overhead power lines, They require special pilot training, because driving in three dimensions is harder than driving in two, and when your car stalls out, you can usually make it to the curbside a lot easier than you can recover if your rotor stalls. In other words, the reasons why futuristic flying cars haven't emerged is because of safety and societal concerns.

Google recently pulled the plug (for the nonce) on their Glass experiment, at least for the nonce. It was a cool idea in theory, but in practice, you had the gargoyle effect predicted so presciently by Neal Stephenson in Snow Crash - people become extremely uncomfortable when they are being recorded, and that provides a huge disincentive to use them in a social setting. Are immersive glasses dead? No, not at all, but they won't emerge except as part of a game context (where they will likely do incredibly well, as Oculus Rift is proving out).

The more that a given technology forces a person to make a radical change in their own workflows, playflows and social interaction, the more that this technology will be resisted. Gamers are a natural target for immersive technology, because their whole goal is to put themselves into the context of a game. Social glasses, on the other hand, border on the creepy and stalkerish, and this association was picked up almost immediately by the tech media (which can, on occasion, be creepy and stalkerish :-).

We've been making lifelike animatronic figures for decades; hook up the servo mechanisms to an AI and you're not far from humanoid robots. And yet, I think that Disney's Big Hero Six nailed a very significant point. The robot protagonist of that film looks like a balloon figure or toy (okay, maybe the Staypuffed Marshmallow Man from Ghostbusters), but he was a very plausible robot. Why? Because he looks cute without looking human. Disney's actually mastered this - they could (and have) created very human seeming digital actors in their productions, but if you look at the style of animation that Disney uses for films like Tangled and Frozen, what you see are plausible but clearly caricaturized humans. We humans at a very deep level do not like "others" that are nonetheless similar to us, and the further that we keep away from the Uncanny Valley, the less that fear manifests.

In the end, what will appear in the future will be that which moves us seamlessly from one way of doing things to another without any clear cut disruption, will focus first on those who have the greatest interest in gaining the benefits of that technology without stagmitizing them, and will keep away from reminding us that our technology could potentially one day replace us.

#7. Ask "What If?"

Perhaps the most important tool that the Futurist has in his or her toolbox is the ability to ask "What If?" Another name for "Futurist" is "Science Fiction Writer". This is not to say that the future is filled with starships and giant moon-sized planet destroyers and laser guns. Indeed, while these were staples of science fiction in the 1940s and 50s, these were extrapolations that were made based primarily upon what the future looked like then.

Most speculative fiction writers (what the genre is typically called today) actually focus upon a specific set of plausible conditions, then work out the "social" rather than the scientific implications of these play out. Why? Because when we talk about the future, we are in fact talking about the stories of the social future - the technology is generally just there to provide color and set the stage. It explores the consequences of our actions (intended and unintended), the ramifications of our decisions, perhaps even answers the question about what exactly it means to be human.

So a good exercise in predicting the future is to take a trend, say climate change, and ask what happens in ten years, in twenty, in fifty, a hundred, a thousand. Use scientific understanding and the constraints that you aware of, with the occasional hint of Clarke Sauce (Any sufficiently advanced technology is indistinguishable from magic. Arthur C. Clarke) in order to provide just enough "magic" to simulate that advanced technology. Then start asking "What if?"

"What if storms become so powerful that they make rebuilding impossible? How do people adapt? Do they start building underground? Do they develop architectures that can withstand these kinds of winds? What do they look like? What if the sea level rises by twenty feet? Will New York City become abandoned? Will the city become a series of interconnected levels? Will it be built to float? Will part of the population become aquatic? Will we have mermaids swimming in Central Park? How will the young adapt? What will happen to those who can't? What happens when the Midwest becomes a desert that's too hot to live in? What will people do? What happens to cities, to governments?"

Each of these spawns a story, looks at a potential future. Some of them are silly - that's all right, sometimes the world is silly and absurd, and stranger things have happened. Sometimes the stories are disturbing in the extreme, because there are times when the future is grim and horrible, or are so perfect as to lead to stagnation, and ultimately rebellion. Most of the times, though, they are just explorations of what the world will be like when you ask "What if?", the story of an ordinary person in an ordinary world that just happens to be fifty years from now.

Exploring the Future

People who "predict the future" for a living are not in fact going to be able to tell you what the winning lottery number is two years from now or the name of the president in 2032. Rather what they are looking at are how trends play out vs. other trends, how the weft and weave of society will most likely get woven, and, to a great extent, what happens when things change (and when they don't). They offer multiple futures, like the Ghost of Christmas Future, that may take place if we take this road or that, spend our money wisely or foolishly, treat others with compassion or disdain. To that end, it behooves most people to think about exploring the skills of "looking through the glass darkly", because ultimately we will, all of us, live in the future one day.

Kurt Cagle is an information architect, data scientist, author and industry analyst who works for Avalon Consulting, LLC., specializing in document and data semantics, ontology design and data virtualization. He is available for consultation. His clients have included Fortune 500 companies and US and European Federal Agencies. He lives in Issaquah, Washington, where he's working on his latest novel,Storm Crow.