For a technology to be “exponential,” its capability doubles on a regular basis—for example, every 12, 18 or 24 months—and its cost falls by half.

As humans, we tend to overestimate what can be achieved in the short term and vastly underestimate what can be achieved in the long term. We are not equipped to process exponential growth. Intuitively, we use the pace of change we’ve seen in the past to predict the pace of change we will experience going forward. We tend to assume a constant rate of change—thinking linearly rather than exponentially. Thinking exponentially, however, is key to discovering potential new opportunities and building innovative solutions.

The Law of Accelerating Returns and Moore’s Law are both central to understanding exponential growth:

The rate of progress in any evolutionary system—a system in which more capable methods developed in one stage are used to develop the next stage—increases exponentially. The more advanced an evolutionary system becomes, the faster it improves. Advances breed faster advances, which we describe as the Law of Accelerating Returns.

The results of exponential progress will inevitably surprise our linear brains.

Linear

If we picture 30 linear steps (measured in meters) in our minds (1, 2, 3, 4, etc.), our brains have an easy time understanding that we’d arrive 30 meters away at the end of that trip. Contrast this result with the following.

Exponential

If we picture 30 doubling steps (1, 2, 4, 8, 16, 32, etc.), our brains have difficulty grasping the magnitude of that trip. It’s more than 1 billion meters (1,073,741,824 meters) or roughly 26 times around planet Earth. It’s the gap between linear and exponential that is at the heart of why the future is so uncertain, and the present is so unbelievably surprising.

Computing power has exponentially increased in price-performance for over a century. Progress in the most recent computing paradigm, transistors and integrated circuits, is commonly ascribed to Moore’s Law. This is the observation that the number of transistors per square inch on integrated circuits has doubled every 18 months since they were invented in 1958 and the prediction that this trend would continue into the foreseeable future. Moore’s Law is only applicable to the most recent paradigm of computing; however, the exponential increase of price-performance holds true for earlier paradigms too—including electromechanical, relay, and vacuum tubes—and it is likely new paradigms will continue the trend in the future.

Theodore Wright proposed what is known as Wright’s Law in 1936. Wright’s Law holds that the more experience we have producing something, the better we get at it. More production correlates with falling prices. Specifically, each time total unit production doubles—say, we’re making solar panels, for example—cost falls by a constant percentage.

‍
Wright’s Law Formula

Y=aX^b

Y = cumulative average time (or cost) per unit
X = cumulative number of units produced
a = time (or cost) required to produce first unit
b = slope of the function

Exponential technologies are technologies undergoing accelerating progress with the potential to reshape industries and all aspects of our lives. Examples of these technologies include networks and computing, artificial intelligence (AI), augmented and virtual reality (AR/VR), digital biology and biotech, nanotechnology, robotics, and digital fabrication.

We believe solutions to the world’s most pressing challenges lie at the intersection of these exponential technologies. That is, when we apply combinations of two or more of these technologies to attack a persistent challenge, the possibility of developing a sustainable solution becomes much more likely.

For example, consider a potential healthcare solution that leverages machine learning, public digital health records, and individual genetic profiles to help prevent heart disease. Or consider another solution that might use personal health records, a new biosensor, and the data from smartphones to predict the presence of cancer.

We encourage leaders to look for powerful solutions where exponential technologies converge.

Shareholders, customers and employees increasingly require companies to be good stewards of the planet. We use the United Nations SDGs (Sustainable Development Goals) as a framework to define how exponential technologies can advance both corporate and impact goals.

Learn more about all 17 SDGs:

Peter Diamandis created a great framework (called Peter Diamandis’ 6 Ds) describing the exponential journey a technology takes after it goes digital.

Digitized:‍

When a technology is digitized it becomes an information technology and hitches itself to the same exponential growth we see in computing.

Deceptive:

Exponential growth is hard to spot. Early doublings of exponential trends are almost imperceptible.

Disruptive:

The deceptive phase is followed by explosive growth. This phase can rapidly make the previous paradigm effectively obsolete, out-performing it in both capability and cost.

Dematerialized:

The miniaturization of sensors paired with digitization allows for the elimination of dedicated single-use physical devices. For example, many discrete items that were once large and unwieldy—from flashlights to cameras—have been merged on a single, digital device that easily fits in our pockets. 

Demonetized:

The cost of producing and copying software is dramatically cheaper than making a physical product, and the economies of scale associated with miniaturized sensors allow them to become eminently affordable. GPS systems and high-resolution video cameras were prohibitively expensive in the past—now they come stock on your standard smartphone.

Democratized:

Products, services and information that were once only available to wealthy nations, research labs or companies become accessible to nearly everyone. A smartphone with an internet connection yields access to information and services beyond the reach of world leaders and billionaires even just a few decades ago.