| The replacement of a technology by a better
one seems to be driven by chance. It is rife with power stuggles
between old and new firms, politics, screwball personalities of businessmen
and investors, consumer prejudices, and what have you. Who could hope to
predict how fast detergent would replace soap, or basic-oxygen steelmaking
would replace open-hearth?
Still, the Fisher-Pry rule does predict such changes. It predicts that the market share of the better technology will grow along an S-shaped curve called a sigmoid: exponentially in the early stages, near linearly at about 50% market share, exponentially slowing as 100% is approached. Market share, plotted with appropriate scales, follows a nice straight line, with little scatter.
Fisher-Pry is no wild hypothesis: it is impressively exact, and is well-verified in many cases, including soap and steelmaking. It has been generalized by Cesare Marchetti, of the International Institute of Applied Systems Analysis in Austria, to the case of many competing technologies: specifically, to energy sources such as wood, coal, oil, gas and nuclear. Plugging current data into his equations, he was able to "predict" their market shares back to the beginning of this century. Right through a host of wars and a major depression! With good accuracy! In Marchetti's model, the crucial factor determining the rate of growth is how much more profitable one technology is than another. So what? So if we peer real hard, we can see ideas as a kind of technology: they embody knowledge, lead to action, and some are better for you than others. Better ideas can make your thinking and action more efficient by conserving your leisure, just as a superior technology can save you money. So there is good reason to expect better ideas to replace worse according to Fisher-Pry. So there is good reason to expect exponential growth in the 'market share' of superior ideas, no matter how unpopular they are at first. When a technology or an idea has been around long enough to have a track record of growth, we can predict its future growth with some confidence. Historically, the doubling time of basic moral and political ideas (the real earth-shakers) seems to be about 10 years; modern communications, better crafted ideas and deliberate quackgrass activism may shorten that. Fisher-Pry can tell us something about the future. Internet has a long record of doubling annually, so Fisher-Pry is telling us that within 10 years internet connections will be as common as telephones. Homeschooling is growing exponentially with a three year doubling time at the expense of public schools, so Fisher-Pry is telling us that the public schools are in process of dissolution. (It is also telling entrepreneurs that products and services which help parents with homeschooling are likely to be handsomely profitable!) E-gold is growing exponentially with a doubling time of 4 months, so Fisher-Pry is telling us to expect a worldwide gold standard real, real soon! Fisher-Pry is hinting that capitalist ideas will continue to flourish. So the welfare state is likely to vanish, perhaps as suddenly as the Soviet Union, perhaps within 10 years. If you can take a hint, save and invest every penny you can, lest you be dependent on a welfare state that may soon be defunct. Since no one can dictate the process by which ideas spread, those who wish to drive it must understand it: nature, to be commanded, must be obeyed. Good ideas will win, eventually: knowledge is power. |
That
straight line speaks volumes: it says chance has little to do
with the process: technological replacement is inherently predictable!