Accelerating Obsolescence

Long term assets and small steady improvements are in trouble.    

Moore’s Law, the oft cited 20th Century paradigm that computing power doubles every two years, is a harbinger of life and work in the 21st Century.  Today, the entire world evolves at an exponential rate.  Accelerating change is not just driving computer power, it is transforming everything we do, know, and own.    

Change Consumes Us

Of course this is good.  We benefit from new opportunities and capabilities. However, this stunning growth in future possibilities is matched by an equally precipitous decline in the value of the long term assets we use to support ourselves. 

Accelerating change makes our long term assets obsolete and demands a new type of business investment.

The value we bring to the market falls each day.  Between when a student starts college and when they graduate their field of study will likely double or triple in size, their investment in knowledge will already be severely diminished.    

Change consumes past sources of value.  

The same is true for business.   In the late 1990’s a communications industry exploded out of nowhere to built the global fiber optic network.  Job demand skyrocketed.  Stock prices soared.  Then after only a few years, the entire industry  shrank away, having largely finished their work. 

Repeatedly Reinvent Value 

The half-life of economic value is shrinking.  This is a fundamental aspect of 21st Century economics and as such it affects individual careers, businesses and entire industries.    

  • Diminishing Wealth – What we have today will not support us tomorrow.  All our intellectual, business, and product assets are rapidly losing their value.  We are becoming ever poorer, quicker.   
  • Repeated Invention –   Something new must be added to the pipeline to take the place of obsolete assets.   There must be a practiced ability to repeatedly invent and deliver ideas.
  • Shorter Payback – As the economic life of products and services becomes shorter and shorter, organizations must find ways to recoup their investments in ever shorter time frames.

Long term assets do poorly in this environment.   The 20th Century tradition of investing in large costly operations and making years worth of incremental improvements is being overrun by accelerating obsolescence.   Repeatedly creating new assets is a necessary part of the 21st Century’s essential skills.

Takeaway

Rapid obsolescence will change the assets we create.  

Good Reads

Kurzwiel …

Brainstorming Questions

  • Does the organization act like its existing assets are rapidly depreciating
  • How much of the organization’s business investment is directed toward assets that are losing value?
  • How much of your personal investment is dedicated to replacing career assets? 
  • How quickly can a new idea be envisioned, architected, executed, and profitably marketed?
  • Is creative change routine?  Can the organization repeatedly execute new ideas, or is it viewed as a special atypical activity?
  • How long does a product or service need to be viable to recoup its investment?

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