Thinking Exponentially

Exponential GrowthWe are at an interesting point in human history where there is rapid growth in a number of different areas that are all having or will soon have a profound impact on society. And by rapid growth I am talking about exponential growth, because most people assume that even fast growth is straight-line and linear.

Most things around us grow over time with linear growth, which is growth done at a consistent rate. But exponential growth happens with a repeated multiplication of the rate of growth. Linear growth results in straight-line growth while exponential growth results in explosive growth.

An example of exponential growth is the old Chinese story about a man who did a favor for an emperor and asked to be paid in rice. He wanted one grain the first day, two grains the second day, and so on for a month. The emperor though this sounded like a great idea until a few weeks into the process it became clear that he would soon be paying with all of the rice in China.

We’ve had a few examples of exponential growth in the US economy in the past. Consider the growth of televisions in households. These went from being in a very few homes in the late 40’s until practically every home in the country had a TV by the mid-50s.

We have one example of exponential growth in the broadband industry which is that the growth in the amount of data downloaded by the average home, which has been doubling roughly every three years since the late 80s. And we’ve seen the result of this growth manifested by the quickness with which any new broadband technology gets overwhelmed and obsolete within a relatively short time after hitting the market. Consider DSL. When we all got our first 1 Mbps DSL connection it felt extravagantly fast. I remember talking about how wonderful it felt to have a T1 in my house. But that excitement faded quickly when within a few short years that DSL felt inadequate.

The human mind does not easily grasp the idea of exponential growth. I’ve seen this many times with network planning. Engineers will plot out expected network growth linearly and will increase the size of the data electronics on a network only to find out, often within a very short time that the new facilities are full and overloaded. Exponential growth almost always surprises us.

We are now sitting at a time when there are a number of examples of exponential growth happening in different technology areas. Ray Kurzweil was one of the first to identify the impact of exponential growth in today’s world back in 2006 in his book The Singularity is Near. In that book he discussed five paradigms in the computing world that had grown exponentially in the 20th century: electromechanical, relay, vacuum tubes, discrete transistors, and integrated circuits.

Kurzweil has made very good predictions about the last decade and has made the following predictions about the next few decades:

  • Within a decade from now solar power will generate the majority of the world’s electricity;
  • By the late 2010s, glasses will beam images directly onto the retina. Ten terabytes of computing power (roughly the same as the human brain) will cost about $1,000.
  • By the 2020s, most diseases will have been cured by nanobots in our blood stream. Computers will easily pas the Turing test. Self-driving cars will be the norm and people won’t be allowed to drive on highways.
  • By the 2030s, virtual reality will begin to feel 100% real. We will be able to upload our mind/consciousness by the end of the decade.
  • By the 2040s, computers will be a billion times more capable than biological intelligence. Nanotech will enable us to make food out of thin air.
  • By 2045, people will be able to multiply our intelligence a billionfold by linking wirelessly from our brains to the cloud.

These predictions are all amazing and speak about a near-future world that is very different than today. But what they speak about even more is the power of exponential growth. In order for these predictions to be realized there needs to continual exponential growth in the fields of computing, artificial intelligence, biological sciences, etc.

The Law of Accelerating Returns

exponential-growth-graph-1Ray Kurzweil, the chief engineer at Google, was hired because of his history of predicting the future of technology. According to Kurzweil, his predictions are common sense once one understands what he calls the Law of Accelerating Returns. That law simply says that information technology follows a predictable and exponential trajectory.

This is demonstrated elegantly by Moore’s Law, in which Intel cofounder Gordon Moore predicted in the mid-60s that the number of transistors incorporated in a chip will double every 24 months. His prediction has held true since then.

But this idea doesn’t stop with Moore’s Law. The Law of Accelerating Returns says that this same phenomenon holds true for anything related to information technology and computers. In the ISP world we see evidence of exponential growth everywhere. For example, most ISPs have seen the the amount of data downloaded by the average household double every four years, stretching back to the dial-up days.

What I find somewhat amazing is that a lot of people the telecom industry, and certainly some of our regulators, think linearly while the industry they are working in is progressing exponentially. You can see evidence of this everywhere.

As an example, I see engineers designing new networks to handle today’s network demands ‘plus a little more for growth’. In doing so they almost automatically undersize the network capacity because they don’t grasp the multiplicative effect of exponential growth. If data demand is doubling every four years, and if you buy electronics that you expect to last for ten to twelve years, then you need to design for roughly eight times the data that the network is carrying today. Yet that much future demand just somehow feels intuitively wrong and so the typical engineer will design for something smaller than that.

We certainly see this with policy makers. The FCC recently set the new definition of broadband at 25 Mbps. When I look around at the demand in the world today at how households use broadband services, this feels about right. But at the same time, the FCC has agreed to pour billions of dollars through the Connect America Fund to assist the largest telcos in upgrading their rural DSL to 15 Mbps. Not only is that speed not even as fast as today’s definition of broadband, but the telcos have up to seven years to deploy the upgraded technology, during which time the broadband needs of the customers this is intended for will have increased to four times higher than today’s needs. And likely, once the subsidy stops the telcos will say that they are finished upgrading and this will probably be the last broadband upgrade in those areas for another twenty years, at which point the average household’s broadband needs will be 32 times higher than today.

People see evidence of exponential growth all of the time without it registering as such. Take the example of our cellphones. The broadband and computing power demands expected from our cellphones is growing so quickly today that a two-year-old cellphone starts to feel totally inadequate. A lot of people view this as their phone wearing out. But the phones are not deteriorating in two years and instead, we all download new and bigger apps and we are always asking our phones to work harder.

I laud Google and a few others for pushing the idea of gigabit networks. This concept says that we should leap over the exponential curve and build a network today that is already future-proofed. I see networks all over the country that have the capacity to provide much faster speeds than are being sold to customers. I still see cable company networks with tons of customers still sitting at 3 Mbps to 6 Mbps as the basic download speed and fiber networks with customers being sold 10 Mbps to 20 Mbps products. And I have to ask: why?

If the customer demand for broadband is growing exponentially, then the smart carrier will increase speeds to keep up with customer demand. I talk to a lot of carriers who think that it’s fundamentally a mistake to ‘give’ people more broadband speed without charging them more. That is linear thinking in an exponential world. The larger carriers seem to finally be getting this. It wasn’t too many years ago when the CEO of Comcast said that they were only giving people as much broadband speed as they needed, as an excuse for why the company had slow basic data speeds on their networks. But today I see Comcast, Verizon, and a number of other large ISPs increasing speeds across the board as a way to keep customers happy with their product.