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February 21, 2014 5:57 pm

The magic of collision and capitalismBy Ken Fisher

Technology is colliding. From it will come ideas none of us can envisage

our life is about to improve in ways hard to imagine and hard to believe. Headlines focus on the negatives, they always do. But

forget today’s myopic warnings of emerging markets meltdown, deflation death spirals, perma-stagnation and all the rest. In 20

years your world will be exponentially more prosperous and your quality of life immeasurably better.

How? Technology is colliding. From it will come ideas, creations, machines, gadgets, medicines and more that none of us can envision

today. Things will get cheaper, make us more productive, stretch resources further and render faster economic growth. Growth won’t

come at a steady rate but the science and technology will.

Take America’s shale gas revolution. In the late 1990s, geologists discovered they could combine two familiar technologies – hydraulic

fracturing and horizontal drilling – to extract oil and natural gas trapped in shale rock. A decade later fracking began booming. Today,

US oil and gas output is at multi-decade highs. Gas-fired power plants are replacing coal, producing cheaper, cleaner electricity. Home

heating bills are down, So are businesses’ energy costs – goods are cheaper to produce and firms can direct capital elsewhere, such as

research and development.

Shale is one reason that the US is leading developed-world growth. Money saved on energy offsets other factors. Cheap energy fuels

industry and boom towns along major active shale formations bring thousands of new businesses and jobs, all from colliding two

technologies.

Electronics will do the same. Moore’s Law, which says the number of transistors you can fit on a semiconductor doubles every 18

months, is almost 50 years old and still holds good. But people ignore Koomey’s law, which posits similar gains for energy efficiency in

computing – estimated to last 50 years – and Kryder’s Law, doing similarly for hard disk memory storage. And the Shannon-Hartley

Theorem for information transmission speeds in communication. No one can fathom how these technologies will compound while

colliding on top of each other.

I can’t. But what is certain is that the benefits received from recent consumer firms utilising technology – such as Google, Facebook,

Netflix or Apple – or leading-edge technologies such as 3D printing, will pale by comparison. Technology has advanced everything. But

technology collision is only beginning. Electronics moved us to digital surgery and microsurgery, but DNA sequencing is also moving at

Moore’s Law-like speed and will collide with all other technologies, allowing customised medicine – cures specific to you. Exactly which

ones and when are impossible to know, but that they are coming is certain. In 20 years, the medical world will make today’s world look

as old as today’s makes the 1950s.

Profits will come more from inventive technology consumers than technology developers. The future is about figuring new ways to

consume and combine technologies to do things that no one envisaged before, or solve problems that we might not even realise we

have.

I’m a tree nut. The final frontier in tree science is the underground root action. It can’t be analysed today without destroying the tree,

so we really don’t know exactly how big and old trees work. Collision will over-run that completely in 20 years. Piece of cake! That

same leap to solve the unsolvable will occur in most fields.

We could all be innovators, but only some will be. Winners will include publicly traded companies in every sector – and their

shareholders! Take the iPhone. Nothing in it was new. Apple just saw how to collide technologies in ways that everyone would want.

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Tomorrow’s winners could be anywhere from financial services to cosmetics or toys.

It’s impossible for the naturally sceptical human brain to grasp that we’re at the beginning not the end. The future dwarfs the past. I

don’t want to sound crazy, so I won’t speculate on crazy-sounding specifics, but the collision of these technologies deployed by creative

technology consumers will generate the equivalent of a new industrial revolution in the next quarter of a century. How will all this

crazy-sounding stuff get done? That’s the beauty of capitalism. It will happen naturally without any planning or government action,

spontaneously bursting forth in concentrated fits and starts.

You needn’t invest in “technology”. It can come from anywhere. Nothing can stop it. It will combust! You needn’t do anything. You can

do something. You can keep thinking about it and preparing for it and investing in anticipation that it will benefit almost every part of

society. Doomsayers and fearmongers will still dominate headlines then, as there is a cloud in every silver lining. But if you prepare

yourself for that better world ahead you will get your share of it.

Ken Fisher is the founder and chief executive of Fisher Investments