4 Mental models to spot disruptive technologies early on

“Prediction” of technological change in the strict meaning of the term would require ability to know both what changes could be expected and when they would occur. We can know with high probability what technological changes are likely by looking at a few dynamics

Economic needs and opportunities

The first dynamic element in technology is economic needs and opportunities — Declining productivity of capital in a major industry. Wherever a major industry requires increasing investment to produce the same quantity, especially if the higher capital requirements are not more than offset by savings in labor, the industry is in a sharp decline.

Obvious example is how internet and modern wireless networks economically transformed traditional telephony where productivity of capital declined with increasing scale (cost to add telephone lines, to hire more switching operators etc.)

Gaps in a technology

The second dynamic is the opportunities created by gaps in a technology. A little known example of this is how Sweden, a small country with limited resources became an undisputed leader in high-power technology.