In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discuss Peter Leyden – The Next Big Long Tech Boom. Here’s an excerpt from the episode:
Jake: Yeah. Sure. As I teased before this, here’s some potential optimism that we might look towards. What’s interesting about this is that this guy, Peter Leyden, 25 years ago, he wrote this article as well as a book, I think, that was called The Long Boom. And 25 years ago, he described this introduction of infotech, so digital computers and the internet. It was fundamentally like this new technology that was going to take over the world. He described how it was going to create this long tech boom that was going to drive both an economic boom and a stock market boom.
Tobias: Good call.
Jake: Yeah, pretty reasonably good call.
Tobias: Did he make a lot of money and retire?
Jake: I don’t know.
Energy Tech, Biotech, Second Wave Infotech
Jake: But he’s saying now that he sees a similar setup. And in fact, he thinks that this one is even more dramatic. It has to do with three fundamentally new technologies that are going to have historical impacts. One is energy tech, two is biotech, and the third one is the second wave of infotech that is around AI.
Tobias: Did this come out in 2015?
Jake: [laughs] No, this is this year. So, he says this is a triple whammy of tech, as opposed to the other one, which was just an infotech. And he’s saying this is the long boom squared. And so, the first component– [crosstalk]
Tobias: Cubed, right?
Jake: Well, maybe, yeah. Good point.
Tobias: Sorry, dude. I’m not trying to derail you.
Jake: [laughs] So, energy, he’s talking about how we have to make this transition away from carbon. Solar and wind, is it going to be government or private sector? No one really knows the answers yet, but he believes that we’re going to figure it out and it’ll be this constant churn of innovation and trial and error. Small scale nuclear, probably a big component of the equation. He said the auto industry is clearly on its way with $350 billion in new private investment going into EVs in 2021 alone. I think if I was long, a particular EV company today, I’d be a little scared of how much money is pouring into that, if you believe in capital cycle theory at all. The next big breakthrough thing is biotechnology.
Actually, it has been pretty amazing. It took him 15 years to do this, but 20 years ago, and it cost $2 billion, we sequenced the human genome first. And now, you can get your genome sequence for $1,000. It takes no time at all. And he thinks in the next few years, it’ll be down to $100. And so, it’s been twice as fast as what Moore’s law would have predicted, if you’re using that as an equivalent doubling. Also, on top of that, we’ve got CRISPR as this thing that allows us to monkey around with the genetic code quite a bit more than we could before.
And so, he’s saying that this will allow us to apply it to all kinds of different things, including crops to be more resilient to a difficult climate. If the climate change thing does come as a lot of people are imagining, then we’re going to have to have crops that can handle maybe wider temperature variations, things like that. Cultured meat, he says. So, imagine starting with actual cow cells, like muscle fibers, and then basically growing them in a vat and then being able to turn that into meat that we’re all going to eat. That’s sounds horrific, but maybe there’s– [crosstalk]
Tobias: It might be better than the alternative though.
Jake: It might be better than whatever the alternatives are. And then also, actually, biology creeping into material science. Genetically engineered wood, and plastics out of different living things that will have characteristics about them that we wouldn’t have had previously. So, for instance, plastic bags, which we’re making with petroleum now, could be actually genetically engineered to break down when exposed to saltwater or sunlight in a period of time and they just disintegrate, as opposed to now where they just float around in the Pacific Ocean.
Tobias: I think we cleaning that up, aren’t we? This is some suggestion to get that cleaned up in the next few years.
Jake: I sure hope so, because that’s a pretty-
Jake: -bad stain on humanity. All right. And then the third one is infotech. Three billion more people are going to be connected to the internet for the first time in the next 10 years. Half the population in Asia, two-thirds of Africa, and 40% of Latin America still aren’t on the internet. It feels like it’s everywhere.
Tobias: Lucky bastards.
Jake: Yeah, they are so much happier. [laughs] By the end of this decade, the entire population of 8 billion people will be able to work and learn and shop online, and it’ll be transformative for them. And he also says this experience will be greatly enhanced by the build out of the metaverse. So, I don’t know whose metaverse it is, but we’ll see. Maybe Zuck is– I don’t know, everyone can debate on that one. I don’t have opinions. Also, a full digital transformation of government, which is lagging big time.
And then, he gets into AI and about how mechanical machines gave humanity the ability to dramatically enhance and extend our physical powers. AI is going to do a similar thing for our mental powers. And so, he says over the next 25 years, it’ll become increasingly simple, cheap, and ubiquitous to basically tap into a cloud-based AI and help solve your own problems.
He says long booms are often created– They create the conditions for progress and they’re driven by these introductions of new technologies that create new industries, create new kinds of jobs, create new wealth. And if they’re big enough and transformative enough, they actually take decades to scale and fully build out. And so, it’s hard for us to see the pace of change today. Especially if you’re following the market too closely along and just reading headlines, it definitely feels it could be dour. But if you’re looking out a little bit further and actually do have these longer time horizons, there’s actually a lot of stuff that you could be excited about.
Lack of affordable housing is a big problem right now, and a lot of it has to do with cars. The modern city devotes one-third of the real estate to cars, and they sit 95% of the time. So, maybe autonomous vehicles solve some of this problem and actually make it cheaper to house. Personalized medicine, using all this synthetic biology and AI hopefully lowers the cost of healthcare. It’s been a 60-year struggle going the other direction, but– [crosstalk]
Bill: We got to start killing old people, man.
Jake: That’s the answer? Soylent Green is the answer.
Tobias: Soylent Green.
Bill: I don’t know, but some sort of Jack Kevorkian shit I am in favor of. People live too damn long.
Jake: Could be.
Bill: I would want it. I’m watching it with my grandma. I love her very much, but she’s got to go.
Bill: Her and for us. I’m not saying that in a rude way. If I were her, I would want to go. I say that out of a loving way. But these drugs- her vitals are as good as possible, and our mind is going, and there’s nothing that can be done about it. At that point, I would want a compassionate– I’d kill my dog in the same situation. Somebody out here is like, “Oh, my God,” whatever. Anyway, I digress. But I do think a lot of healthcare costs go on in those years that are not maybe the best allocation of societal resource.
Jake: Yeah, I think you are– [crosstalk]
Bill: Look at me, I’m Obama.
Jake: Yeah. [laughs]
Bill: With my killing panels.
Jake: Death panels.
Bill: That’s right.
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