Why We're Terrible at Predicting the Future (And How to Fix It)

Amara's Law and the hidden potential of new technologies

You’ve seen hundreds of new inventions come into the world during your lifetime.

In just the last 20 years there’s been the rise (and fall for some) of:

• iPods

• Email

• Social media platforms

• Online video games

• AWS

• Blu-ray

• Smartphones

• Electric cars

• Health and fitness devices

• Bitcoin

I could go on but we’re not here to talk about new technology. I’m here to point out our failure to estimate the impact of it. The error of minimal expectations (and how you can avoid it).

Even experts fail to estimate the impact of new technologies. Being well-informed does not mean you understand the consequences or impact something entirely new, on the frontier of technological innovation.

A British parliamentary committee believed Thomas Edison’s lightbulb was “unworthy of the attention of practical or scientific men.” Edison himself only thought his invention of the phonograph would be used for business dictations.

The Wright brothers demonstrated flight after “heavier-than-air” travel was thought impossible. Despite the proof, astronomer, William H. Pickering said “it is clear that with our present devices there is no hope of competing for racing speed with either our locomotives or our automobiles.” In a single statement the world accepted commercial air travel wouldn’t work.

There is a frequent misunderstanding. When it comes to new technology our expectations are set too low. But the ones that escape this error in reasoning leapfrog the competition around them.

The slow burn of innovation

Roy Amara began making the point that we suck at forecasting innovation. Later known as Amara’s Law.¹

Mercedes knew more about the automobile industry than anyone else.

Yet they failed to forecast the future of their cars.

In the beginning the founders, Karl Benz, Gottlieb Daimler, Wilhelm Maybach and Emil Jellinek, didn’t believe there would be more than a million cars in use worldwide (for some perspective they sold 2 million of their cars in 2022).

Amara’s Law states: people tend to overestimate the impact of new technology in the short run, but under-estimate it in the long run.

A simple explanation for why you often miss new technologies that later upend old ones.