Taking a peek into the future

ECONOMIC VIEW

Will technological change continue to go in bursts, with longish periods of relative stability in between, as it seems to have done in the past. Or will it be a continuous, never-ending, helter-skelter process as it seems to be at the moment?

Peter Schwartz, author of the best-seller The Art of the Long View, was in London yesterday for the first meeting here of Global Business Network, the group of forward thinkers/planners around the world, which he co-founded after leaving the scenario planning team at Shell. The nature and pace of technological change is one of the key points of the GBN scenarios which he outlined. Since it seems to be the principal concern of most business people (principally because if technology continues to race forward at an ever-greater pace it becomes very hard to make money out of it) the options that he charted deserve a wider audience.

He outlined four possibilities. The first two involved two different sorts of the "burst of progress/pause and lock in" pattern; numbers three and four, benign and malignant versions of continuous change.

The main difference between the first two is how early the "lock-in" happens. If it is early then frequently the technology is not the best available. For example, the US colour television system, NTSC is poorer quality than the various European ones, while the VHS standard for video recorders is technically inferior to Sony's rival Betamax. But in the first case the early development of colour TV in the US meant that the country got a worse system than the rest of the world, while the market clout of the VHS producers meant that Sony's system failed to take-off. Another example is MS-DOS, but perhaps the best of all is the QWERTY keyboard. This was designed to slow down typists because the arms of the mechanical typewriters tangled up if they were hit too fast, yet more than a century later still dominates the keyboards of the world.

If, however, the lock-in happens late or the standard develops naturally in the market place, then the chances are that the best system will win. The most intriguing example Peter Schwartz cited from the world of TV are the new video standards established not by the conventional television industry but the new software companies. Will our future TV programmes come, not over the airwaves or by cable from a TV company, but down the phone line from a software house?

But even if the lock-in takes place late, scenario two does assume that at some stage there is a pause. And both one and two see standards as something which comes down from producers to the marketplace.

The third scenario is one of perpetual transition and where change comes up from the market. The prime example is the Internet, unplanned, market- driven, and being used for all sorts of things which never occurred to its original users. The characteristics of this type of change include very rapid growth (as with the Internet), and a structure determined by market signals. The principal barrier to the pace of change is the willingness of humans to accept it. But of course we can reject change through the market: we do not have to join the Internet if we do not want to. So this form of change, if a bit frightening, is benign: it carries its own checks and balances.

The malign form of very rapid change is also market-driven, but a market which seems to give the wrong signals. This involves social conflict, violence, market volatility, environmental decay and rising insecurity. Leadership is weak or simply irrelevant. And from a commercial point of view, the pace of change makes it simply not possible to make money out of long-term investment. It is a commercial world, too, where downsizing never ends.

Peter Schwartz reckons that most people in the business community would prefer either the first or the second of the four scenarios: they like an element of institutional stability and a society where authority (be it political authority, or commercial authority) is top-down. They would live with the third scenario, that of constant change. And they fear the final one, rising insecurity and chaos.

My guess is that for the next 20 or so years No 3 is the most probable. Why?

For two main reasons. First, the pace of change in electronic technology is now so fast that there is enough momentum to carry on for at least another 20 years. At some stage the market will signal that we want that change to slow down. We will simply not buy or use the newest things that come along. For example, we may subscribe to TV networks with several thousand channels (indeed the whole idea of a channel may become redundant and we would come to think of TV as access to a library). But we will not spend any more time watching the screen. So there will be a stage where there is no point in supplying more information. The market will signal it has enough. But because the possibilities are so enormous we are not going to hit the boredom threshold for a while yet.

And because technology will carry on racing forward, its social consequences will carry on too: companies will carry on getting smaller, politicians will carry on becoming less important, voluntary groupswill carry on increasing their clout.

The second reason leads on from this. In western societies it is very difficult to see top-down standards being acceptable. Of course long-established standards will stay. But new standards will only stick if the market accepts them. And provided technology carries on moving forward, there will therefore be no pause for breath.

But why should option three, benign change, be more likely than option four, the nasty one? Here, the main reason for cheer is surely precisely because societies' leaders are insecure they will behave better. Think of Edwardian England, blithely heading towards world war. Or of the arrogance of corporate America of the 1950s. Insecurity may serve us better.