Chart of the Day: The Computing Trend that Will Change Everything

The progress of computational power is the essence of the the information age which will serve as the backbone for the most of technological innovation (whether in big data, smart manufacturing and wireless revolution).

From technologyreview.com

The performance of computers has shown remarkable and steady growth, doubling every year and a half since the 1970s. What most folks don't know, however, is that the electrical efficiency of computing (the number of computations that can be completed per kilowatt-hour of electricity used) has also doubled every year and a half since the dawn of the computer age.

Laptops and mobile phones owe their existence to this trend, which has led to rapid reductions in the power consumed by battery-powered computing devices. The most important future effect is that the power needed to perform a task requiring a fixed number of computations will continue to fall by half every 1.5 years (or a factor of 100 every decade). As a result, even smaller and less power-intensive computing devices will proliferate, paving the way for new mobile computing and communications applications that vastly increase our ability to collect and use data in real time…

How long can this trend continue? In 1985, the physicist Richard Feynman calculated that the energy efficiency of computers could improve over then-current levels by a factor of at least a hundred billion (10¹¹), and our data indicate that the efficiency of computing devices progressed by only about a factor of 40,000 from 1985 to 2009. In other words, we've hardly begun to tap the full potential…

The real life impact of the Moore’s law applied to electrical efficiency of computing, from the same article…

The long-term increase in the energy efficiency of computing (and the technologies it makes possible) will revolutionize how we collect and analyze data and how we use data to make better decisions. It will help the "Internet of things" become a reality—a development with profound implications for how businesses, and society generally, will develop in the decades ahead. It will enable us to control industrial processes with more precision, to assess the results of our actions quickly and effectively, and to rapidly reinvent our institutions and business models to reflect new realities. It will also help us move toward a more experimental approach to interacting with the world: we will be able to test our assumptions with real data in real time, and modify those assumptions as reality dictates.

Blaming Technology to Justify Tobin Tax

The Economist writes, (bold emphasis mine)

MOORE'S Law, an observation that the "number of transistors incorporated in a chip will approximately double every 24 months", has held broadly true since the creation of the first transistor in 1947. Computing power has increased some 600-fold over the past 15 years; 2.6 billion transistors can now be crammed onto a single computer chip. This advancement has facilitated the ability to trade ever-larger volumes of shares. During the 1960s, just under 17 billion shares were traded on the New York Stock Exchange. That amount was surpassed over just four average trading days in September 2011. And while the number of shares listed has increased by some 50-fold, annual share turnover has increased from an average of 17% in the 1960s to nearly 300% between 2008 and 2011. In theory all this activity ought to lead to more accurate pricing of stocks and more efficient allocation of capital. In practice there is a lot of tail-chasing going on. That has led to calls for a tax on financial transactions, the Tobin tax, which advocates argue would be a painless way of boosting government finances.

While it may be true that technological innovations may have boosted stock market trading volumes via widespread dispersion of information, deepening connectivity, algorithm based and real time trades, growing array of trading instruments and others, it doesn’t follow that “a lot of tail chasing” or market volatilities can be blamed on technology enhancements.

This seems to be a non-sequitur used to justify taxes on financial transaction which will only lead to more government spending based debt accumulation which ironically has been the root of today’s crisis and the consequent market volatilities.

The article also excludes the effects of the intensive politicization of the marketplace which leads to massive price distortions, malinvestments and business cycles.

Beware of politically biased commentaries veiled as expert opinions.

Technology Curve: Terrific Advances In Supercomputers

The technology curve has indeed been accelerating as the capacity of supercomputers continually soar.

This update from the Economist,

``AMERICA's dominance in the field of supercomputing has slipped over the past decade, according to the latest TOP500 chart, a biannual list of the world's fastest number-crunching machines. Having accounted for 56% of the top 50 machines a decade ago, America now accounts for 40%. Japan has lost ground too, while Britain and Germany have held steady. The greatest gains have been made by France, due in part to the use of supercomputers in the energy industry, and China, which had no supercomputers in the top 50 a decade ago, but now has four, including the world's second-fastest machine, at the National Supercomputing Centre in Shenzhen. Other countries have also moved up the rankings, which indicates that supercomputers are more widely distributed around the world than they used to be: the top 50 machines include computers in South Korea, Saudi Arabia, Switzerland and India."

The loss of the dominance of the US in this field does not exhibit a zero sum based competition, where one's gains translates to the loss of the others, which appear to be the undertone of the article.

What's truly happening is that the progress in technological innovation in supercomputers have been more diffused globally where more nations have been participating in the growing pie.

The general advances in the capability of supercomputing from Top500.org illustrates of the dynamics of the growing pie. The progress has been breath-taking.

In my view it's merely the motions of Moore's law at work, and possibly Ray Kurzweil's technological singularity.

And this has been fuelled by competition, globalization and collaboration.

And it would be a mistake to gloss over the implications of such remarkable progress in technology innovation to the real economy.

Read more interactive graph of supercomputers from BBC here