Tuesday, August 11, 2015

The Problem With Silicon Valley Is The Scale

From Dizzynomics:

Breaking the wheel
About a year ago I interviewed Geoffrey West, a well known complexity scientist and theoretical physicist at the Santa Fe Institute, regarding city scaling and the ticking time bomb we’re facing with regards to sustainability.

At the time I was in my tech-utopian phase. I put it to West that technology could help us overcome this challenge, if not, in the words of Khaleesi, “break the wheel” representing the vicious nature of the innovation cycle that West claims quickens the pace of life for all of us unsustainably.
You see, according to West’s research the period between each disruptive cycle is getting shorter. At the same time the scale of the disruption is intensifying — something which must continue to happen if our growing and scaling system is to avoid collapse:
Screen Shot 2015-08-04 at 23.52.53
But West is not optimistic that technology can break the wheel. In his opinion, the system always wants to return to the equilibrium state, and this — unlike the disruptive cycle — is connected to humanity’s own capacity for change, which isn’t all that great.

Essentially, it takes much longer for human behaviours to change than for new technologies to be rolled out. What’s more even if we did change our behaviours, there’s so much legacy infrastructure around, the environment prevents our behaviours from changing too much.

Geoffrey West, in short, is very pessimistic. His research states that the bigger human social networks get the more they speed up, a fact that runs contrary to the way biological and sustainable natural systems scale. These slow down as they get bigger.

Why do bring this up?

Because, like I said, at the time I didn’t believe that technology couldn’t overcome this challenge. I was all drunk on the potential of the sharing economy and such things to allow us to do more with less.
Many months later, however, I think I finally understand West’s concerns.

With respect to the sharing economy’s ability to “unscale” things he specifically noted that this is probably a short term phenomenon while the economy adjusts to a new phase.

This is important because it gets to the heart of the Silicon Valley problem.

First, for networks to genuinely unscale the system they have to be true sharing economy models.

Think homeswapping rather than Airbnb. Carpooling not Uber. Shared dining, not bespoke individualised dining at home. Problem is those models genuinely can’t scale. And there will never be squillions of dollars to extract from such systems. Think even of bitcoin which notoriously can’t scale without blowing up the whole system and/or turning into the conventional banking model.

West’s point is that human scaling forces tend to pile resources into the models that can scale. This, of course, is why we’ve ended up with the rise of the Faux Sharing Economy, epitomised by Uber and Airbnb....MUCH MORE