🔮 What doesn’t change
Amidst the turbulence, some things will stay the same – and they matter!
The American electorate has delivered a comprehensive mandate to President Trump.
What we know now that we didn’t know earlier this week is that the majority of American voters want a different politics, a different game. If the Democrats and the pre-Trump GOP were playing tennis, voters wanted hockey. The Trump of 2016 kind of got that; the one of 2024 really promised them hockey. Democracy worked on Tuesday, even if the Democratic Party didn’t.
I don’t consider it my place to go into political analysis – so I won’t. What I will do today, however, is try to provide anchoring in the fact that the exponential transition to an abundance of energy and intelligence will not stop regardless of who is in the Oval Office.
Two things we need to understand. First, we’re in a phase change. Over the next five years, the forces of AI, the energy transition and geopolitics will continue to accelerate. Change will come sooner than most think. Although we can’t yet wrap our minds around what this will feel like, there’s a general sense that we’re at a turning point. Well, we are. We’re early on the inflection curve and the ride will get stranger as we go.
Politicians are not ready for this – the old ways no longer work. Unsurprisingly, incumbent politicians have had a bad year all around the world. I saw this coming in my first book in 2020.
The second thing to understand is that it’s about time everyone paid more attention to technological learning rates – the speed at which learning and improvement occur in a system. The faster we learn how to build and implement technologies, the faster the cost of those technologies drops. As the costs come down, markets expand, creating incentives for new businesses to form around those technologies. Scale effects then enter the picture, and the flywheel picks up.
Learning rates drive exponential technologies which will be the hallmark of the coming years. There is increasing evidence that AI can improve productivity in foundational activities. Consider this recent MIT paper which found that materials chemists using AI discovered 44% more new materials and generated 18% more downstream innovation. AI could increase productivity growth rates regardless of who is in the White House.
The most interesting areas of industrial innovation and strategic autonomy are in climate tech — zero-carbon materials, the new energy system, the bioeconomy and new industrial techniques. Climate change adaptation and mitigation require coordinated action. In an administration that might lack an interest in coordinating, technology may be what creates the space for policy and action.
Even if the policy shifts from the White House bring a speed bump1, we’ll continue moving towards a transition to renewables and electrification. As the cost of green technologies comes down, the economics will make a case for using them.
The big story about climate change and adapting the economy, for instance, has been that replacing a wasteful, fossil-driven economy is expensive. Sure, it’s much more expensive to make Galvorn2, a steel replacement that is carbon-negative in production, than it is to make the steel (and other metals) it can replace. But technological learning will drive the costs of Galvorn down, down, down. It’ll be better and cheaper. We’ve seen this with renewables, and the pace won’t stop.
But who could deliver on this promise?