avatarMats Larsson

Summary

Intelligent people often mistakenly assume that a technology's existence implies its widespread and immediate adoption.

Abstract

The author discusses a common mistake made by intelligent people, which is to argue that a problem will be solved because the necessary technology already exists. This misconception overlooks the fact that a technology's availability as a prototype or early product does not guarantee its mass adoption or global impact. The author cites examples such as cold fusion technology, climate change, and electric vehicles to illustrate this point.

Opinions

  • The author argues that people often draw incorrect conclusions about the potential impact of new technologies, assuming they will be rapidly adopted and change the world.
  • The author believes that people tend to make this mistake due to the availability heuristic, a cognitive bias where we think that easily remembered information is more important or relevant than it actually is.
  • The author asserts that most new products and services fail, and only a small fraction of technologies become widely adopted "general purpose technologies."
  • The author highlights that the logic behind believing electric vehicles will automatically become dominant in transportation overlooks the required investments, potential high costs, and alternative development paths.
  • The author suggests that to avoid these mistakes, people should stop and think, switch from "System One" thinking (intuitive and automatic) to "System Two" thinking (analytical and deliberative).
  • The author emphasizes that the transformation to sustainable systems, such as electric vehicles or a circular economy, requires significant investments, large-scale change programs, and coordinated efforts in various activities.

The Biggest Mistake I’ve Heard Intelligent People Make

Photo by Marvin Meyer on Unsplash

The Biggest Mistake

The biggest mistake I have heard intelligent people make is to argue that a problem is about to be solved because the technology already exists.

I have heard several professors argue that climate change can easily be stopped, because the necessary technologies have been developed.

Ten years ago, I listened to researchers argue that electromobility could be implemented on a large scale, if only politicians would make the decisions, because the technologies already existed.

I get the impression that people often draw the conclusion that the invention of a new technology would imply that it will be used on a large scale almost immediately.

More than ten years ago it was big news in technology newspapers and magazines that an inventor had developed a solution that would make the energy generation process of “cold fusion” available for many applications. It was speculated that cold fusion generators could be installed in cars to make them run on electricity generated by this futuristic technology.

On discussion forums on the Internet, I was asked by knowledgeable persons if I thought that cold fusion would become the solution to climate change. As most of the participants on the forum seemed elated by the news of the new technology, I said that it will take a lot of work and investment to develop the technology to a level where it will be cost effective and possible to use for a large number of purposes.

We have still not seen cold fusion applied in any mainstream applications and there are no signs that it will be available for the propulsion of vehicles in the next few years. If it would be launched, it is unlikely that it would rapidly become competitive against incumbent technologies for power generation.

Why is This a Mistake?

The fact that a technology exists as a prototype or as a product in one of its first generations does not mean that we can be certain that it will take over the entire market or change the world. Only a very small number of all technologies, products and services that are launched on the market end up as ones that are used by all, or most, people on the planet.

People often make this mistake, that is by the Nobel Prize Winner Daniel Kahneman, in his book “Thinking, Fast and Slow” calls “The Availability Heuristic.” This is the tendency to think that issues we can easily retrieve from memory are by necessity true, and many of us fail to question their veracity or realism.

Most of the products and services we use every day are examples of technologies or business principles that have become “general purpose technologies.” Electricity, computers, the combustion engine, supermarkets, fast food restaurants, and most other concepts that surround us are used all over the world on a daily basis.

It is a very understandable mistake to believe that most products and services that are introduced make it all the way to global domination. This, however, is far from true. Most inventions fail.

A further, but also quite understandable mistake, is to believe that technologies must succeed because they represent one of the necessary solutions to a pressing global dilemma.

The reasoning may go as this: We are experiencing global warming and an increasing share of the global population realise that we need to do something about it. Because of this, we need to change to electric vehicles. Vehicle buyers will buy electric vehicles to an increasing extent and in little over two decades all cars, trucks, and buses will be electric.

This logic seems to persuasive that few people see a need to question the logic. But the logic does not hold. The development may take many other directions and by driving change programmes we can force development to take the direction we want.

What Are We Missing?

When people jump to the conclusion that electric vehicles will almost automatically, and without any difficulties, take over transportation over the next decades, they fail to consider the investments that will be needed in a number of different areas and the aspect that electric cars, trucks, and buses may not go down in price as rapidly as most people seem to expect.

Some politicians and experts even argue that it does not matter how much the vehicles will cost, or how large investments will be needed — the change needs to happen anyway. This would, according to these experts, imply that buyers will put up the money to buy electric vehicles regardless of the price and that investors will have to invest, regardless of the opportunity for the investment to make a profit within a reasonable period of time.

One way to explain the mistake would be to say that people cannot buy electric cars or other electric vehicles if the price is so high that they cannot afford them. And there is no law of business or economics that says that the price must go down to a level where electric vehicles become competitive against petrol and diesel alternatives rapidly enough, so that the present generations will be able to avert climate change.

A few weeks ago, the Chief Manufacturing Officer of the large automotive group Stellantis, owner of Fiat, Peugeot, Chrysler, and a number of other vehicle brands, argued that prices of electric cars may not go down so fast until 2035 as politicians and experts expect. He warned that the car market may collapse as many car buyers may not be able to afford to buy an electric car, and that car sales may plummet because of this when the EU bans the sales of new petrol and diesel cars.

Several other players in the automotive industry have made statements that indicate that the change to electromobility is likely to require much larger investments and change efforts than decision makers at present believe. Elon Musk, the chairman of Toyota, Akio Toyoda, and now the Chief Manufacturing Officer of Stellantis, count among the prominent business leaders that indicate that the change will require more resources and take more time than most people expect.

What We Need to Do?

The book “Thinking, Fast and Slow” has become a best seller. It is quite amusing to read about how intelligent people fail to realise their mistake when they are asked where the probability is highest for an earthquake to happen: In California or the United States? Most respondents answered “California.”

It is easy to believe that by reading the book readers learn to avoid making similar mistakes. Unfortunately, this is not the case. The book discusses examples that most people already know are true. The solution, according to the author, Professor Kahneman, is to stop and think. We need to switch on “System Two” and stop using “System One,” which people usually do when they go on autopilot and jump to conclusions.

The problem with the transformation to a sustainable society is that many people are rewarded for coming up with oversimplified answers, even if they are wrong. To some extent people seem to want to believe that the solution to the climate challenge is straight-forward and countries can switch to electric vehicles, a circular economy, or clean technologies in general, only through some subsidies and by making people aware of the need.

It seems that many believe that if only the majority of people close their eyes and hold hands, miracles can happen.

Instead of repeating mistakes that have been made by people using System One, we need to switch on System Two. We need to realise that large amounts of money will need to be invested in the transformation to sustainable systems and that large-scale change and development programs will be needed.

Many different activities and investments will need to be coordinated, like in the Apollo Program. To change to electric vehicles, countries need to subsidise vehicles to convert vehicle fleets, dramatically expand charging infrastructure, expand power generation and grid capacity, train people in the skills that will be needed to participate in the transformation projects that will be necessary, develop businesses that can expand and take over from petrol and diesel-based transport systems.

If we instead look at the change to a circular economy, there are similar sets of activities and investments that need to be undertaken. To implement circular and more resource effective production and distribution systems in different industries programs and plans need to be developed and implemented and resources need to be allocated to each area countries want to change.

I believe that many people realise that the above is true, because we all have the time to switch on System Two once in a while and engage in some deeper thinking. In the absence of a strong movement in society that promotes analysis and a structured approach to change, most people are afraid to speak up. We are expected to be able to explain our position if we choose to go against the current in society, and this may be difficult.

More people need to join the rapidly growing group that argues in favour of structured and well-planned change programs. Many different activities and investments will be needed and these need to be coordinated. Governments must take the lead, map all activities, and develop programs and plans for the change.

My latest book on innovation and the transformation to sustainability is “The Blind Guardians of Ignorance — Covid -19, Sustainability, and Our Vulnerable Future” and the first one of these was “The Transparent Market,” written together with David Lundberg. In “The Transparent Market” we discussed the future of electronic business. The book was published in 1998, when most experts still did not see that most companies soon would do business on the Internet. My first book about the transformation to e-mobility was “Global Energy Transformation” from 2009.

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