Tuesday, January 12, 2010

The Future Will Be Customized

The archaic model of production was artisan based. If you wanted shoes, you went to a cobbler, who would take measurements of your feet, and a few days later you would come back to pick up your order. If you were poor, you would buy shoes secondhand, or just go barefoot.

The old model is mass production, of the "any color so long as it's black" variety. Eventually this becomes something more like "any color so long as it's black, blue, or green", which gives enough variety for possessions to be relatively distinct, especially since the added cost of something like different colors is trivial. The stuff that actually has to be engineered requires larger costs, and so won't be made unless it has a large enough market.

Eventually a variety of technologies come together to vastly expand available markets and greatly lower the cost to enter those markets, which leads to the current model - long-tail distribution. iTunes can sell not just the big hits (like a physical music store would have to) but really obscure songs that only a hundred people would want to buy. They can do this because the cost of having a song in the store (because of smart searching and digital hierarchies) is practically nothing. In the same way, anyone can start up a website and start selling something, with a cost of about $50, and the search and delivery infrastructures mean that it can actually be worth their while. This leads to things like etsy.com, where people can (for virtually no cost) put their wares online and sell them. Instead of profit being located exclusively at the head of our market size graph, it exists further and further down the tail. Note that this model works better for things that don't require huge amounts of capital to produce, like works of art or small consumer goods. Something like a car still requires a factory, so you're less likely to be able to buy something exclusively suited to you.

The long-tail distribution of goods represents the direction for the future. Production costs for nearly everything are falling, due to improvements in technology. There are two technologies coming down the pipeline, whether it be ten years from now or a hundred, that will drop those costs to practically zero. Those two are artificial intelligence and nanotechnology.

Artificial intelligence will allow the dynamic generation of pure information commodities; books, movies, music, software, and so on. Once those abilities are up to the point of being able to match human quality a large number of things will happen, but one of the biggest will be the near-infinite extension of the long tail. Right now it's not uncommon to find books that only a handful of people read. But with hard AI, there will be books only read by one person; custom crafted to that person's tastes. In the same way that Amazon takes in all of your reviews, rating, and prior purchases to suggest things that you might like, an AI would be able to take in all of that information to create an entirely new work. Alternately, large commercial works would be able to build variability into their pieces - a comedic movie would be able to respond to the audience's laughter in the way a stage production can, for example. This complete customization applies not just to information goods, but services as well. Instead of sitting in a classroom with thirty other students, you would be able to sit in front of your media center and learn from an AI program which customizes itself to your individual needs and learning style.

Nanotechnology means pretty much the same thing for physical goods. In the science fiction version, this means a powder that transforms nearly anything into nearly anything else, usually by rearranging protons, neutrons, and electrons. That's a long way away; in the short run, nanotechnology means that nearly anything will be able to be produced as a one-of. We can do some of this now with 3D printers, assuming that you want to make something out of plastic and at a fairly low resolution. As time goes on, the resolution will keep getting better, and mixed materials will become available. Since information is the only important input, the same rules that will apply to things like movies and books will start to apply to physical things like cars, dinner plates, and so one. Instead of buying a car from a dealership, you'll go to a dealership (or a large rapid production facility), have an AI figure out what your needs and desires are, and custom make a vehicle for you. The same thing will happen to larger things like houses, as nearly all aspects of home construction will be outsourced to cheap AI and robotics. Instead of finding a house suited to you, one will be custom built.

In the future, when this technology comes around - whether that's twenty or a hundred years away - nearly everything will be made on a case by case basis. Everything that you wear, watch, and use will be custom made. The complications that arise from this are numerous; there's already been talk that with the availability of the internet, people are segregating themselves into diverse groups, reducing our ability to get along as a society. When we no longer have even our mass produced goods in common, and a culture of one, what happens then?

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