Rapid development and innovations in artificial intelligence, mobile network technology, quantum computing, nanotechnology and blockchain technology are finding their way into the devices and digital technology we use. However, not until these technologies are conceived of as components of a larger, integrated technology model, will the true disruptive potential of these simultaneously emerging technologies become evident. The idea of the sensor-based economy captures this, and shows how this emerging techno-economic paradigm will reshape our daily lives and economy.

Our observations

  • We have written before on computational models and computers based on quantum mechanics, and how these quantum computers will disrupt many different practices and business models. In fact, quantum computing will herald a new computing paradigm that might not only revitalize but even surpass Moore’s law, given the exponentially increasing computing power of qubit-based quantum computers. Global spending on quantum computing technology will grow by 35% each year between 2018 and 2024. Other inventions in the semiconductor industry – such as 3D chip stacking, integrated circuits (FPGA, ASICS), neuromorphic computation – will boost computational capabilities for cases where quantum computers’ specialized algorithms are not applicable.
  • We have recently written on the foundations of intelligence and the progress made in the development of artificial forms of intelligence. The AI Index Report shows that large gains have been made in (narrow) AI systems in recent years and that they outperform humans in tasks in various domains, such as skin disease classification, poker and reading comprehension. AI can be conceived of as a new general purpose technology. Global spending on AI systems will grow by 50% each year, growing from $10 billion in 2017 to $52 billion by 2021.
  • The number of installed sensors will rise from “only” 15 billion in 2015, to over 100 trillion in 2030, while the number of connected devices will increase fivefold between 2015 and 2025, up to 75 billion. This is made possible by the development of self-powering devices and the continuously decreasing costs of sensors and actuators. Global spending on nanotechnology and devices will grow by 20% each year, set to reach $65 billion by 2019.
  • We have written extensively on the fifth generation of mobile network technology (5G), and the various applications that become possible with ubiquitous and superfast connectivity (e.g. telesurgery, autonomous driving, the Fourth Industrial Revolution). Global spending on 5G mobile network infrastructure will grow by 70% each, to reach $28 billion in annual spending.
  • An open and decentralized internet is taking shape, using blockchain technology, with different cryptocurrencies focusing on different aspects of this new internet architecture (e.g. data storage and analysis, computing and connectivity, identity rights). Recently, Maersk and IBM launched a blockchain platform to orchestrate global supply chains, and companies in Singapore can now buy and sell renewable energy credits in a blockchain-powered trading system. Investments in blockchain technology are set to double in the next five years, with many applications seeing triple-digit annual investments growth rates.

Connecting the dots

Together, the emergence of AI systems, 5G mobile network technology, nanotechnology and –devices, quantum computing and blockchain technology will herald a new techno-economic paradigm, operating at and integrating different layers of the emerging Stack of digital technology. First, ever-cheaper and smaller sensors and actuators (nanotechnology) will lead to a sensorization of our living world. The combination of ubiquitous and superfast 5G networks on the infrastructure layer of the Stack means that everything can be embedded in digital ecosystems full of interacting and communicating humans, objects and devices. Improvements in machine learning on the intelligence layer of the Stack will make devices smarter and more responsive (i.e. inference learning), while generating more and fine-grained insights because of ubiquitous computing. Deep learning – centralized in the cloud – can generate new intelligence on the behavior and patterns of these users and devices. In combination with the ultra-low latency and bandwidth of 5G networks, immediate machine-to-machine communication becomes technically feasible, which is essential for autonomous driving or industrial smart robotics. On the computation layer, quantum computers can provide the required computing power to mine and analyze these huge datasets and perform hitherto impossible calculations in search of new intelligence. All these developments will then feed into platforms and be distributed across users and devices, which will generate a self-reinforcing circle of more intimate interfaces, more data, better intelligence that will increasingly reduce friction, as we have described before. Finally, these communications will be facilitated by blockchain-based technologies and currencies that will provide safe and secure protocols for sharing and using data in the Stack.
The integration of these technologies form the “sensor-based economy”. The core idea is that the stacking of the functions of these technologies – like ubiquitous computing, frictionless customer journeys, low-latency and scalable services and adaptive and responsive environments – will establish a new

techno-economic paradigm. The idea that all “actants” (both human and non-human) will be able to communicate and interact in an intelligent and autonomous manner, is what differentiates the sensor-based economy from previous technological revolutions. Eliminating humans from the loop will create a fully integrated infosphere. Similar to the biosphere that consists of all the environments that support life, the infosphere denotes the whole pool of information that is generated and constituted by informational entities, their properties, interactions, processes, and mutual relations. This will shape our economy and daily lives in, for example, industrial production (i.e. the Fourth Industrial Revolution), machine-to-machine interaction (i.e. the Internet of Things), mobility (e.g. autonomous vehicles), healthcare (e.g. out-of-home care), agriculture (e.g. precision farming, autonomous farming machines) and energy (e.g. smart grids).
Given the exponential power of these sensor-based technologies, the emerging sensor-based economy will also have significant geopolitical ramifications. Putin has said that the country that leads in AI will be the ruler of the world, while the Trump administration is reportedly considering nationalizing 5G networks, and the wide range of quantum applications in military (i.e. in space technology as the next military frontier) and communications has made quantum computing a national security issue in the U.S. and China. The first modern technological revolutions all emerged in the West, during the Atlantic Era, when the global hegemon developed new technologies such as the microchip and the automobile. These techno-economic paradigms also cemented the hegemon’s power, by reinforcing its economic and military capabilities. But as we are moving towards a more equal distribution of global power, exemplified particularly by the rise of China, capital deployment and technological research will also spread more evenly across the world. Hence, the techno-economic frontier in AI, 5G, quantum computing, nanotechnology, and blockchain technology will likely shift to the East and/or scatter across the world.

Implications

  • Digitization has led to “free” products and services. Similarly, intelligent and autonomous devices and robots in the sensor-based economy will enable production and services at or near zero marginal costs. When IP of the means of productions will be owned by the public or citizen initiatives, this will foster new forms of local production and collaborative communities in open-source, decentralized networks. In such an economic model, social capital becomes just as or even more important than financial or physical capital as access trumps ownership, and (communal) cooperation prevails over (market) competition. As a result, the current capitalist socio-economic system of organization and distribution will enter its final phase, and with it the materialistic individualism of “late capitalism” or “high industrial civilizations”.
  • From the perspective of the emerging sensor-based economy, the current trade war between China and the U.S. isn’t just a regular conflict, nor even an attempt by the U.S. to hinder China’s rise. With China’s extensive plans to develop the new standards and lead innovation in AI, 5G, quantum computing, and blockchain technology, the country is developing a future-proof technology stack (as we have written before) that will challenge U.S. hegemony and economic, technological and military dominance, and the global power for planetary network sovereignty.
  • With an increasing number of devices that are close to (wearables) or even inside the body (insideables), an increasing amount of biological data will be revealed and communicated, providing ever more insights into our health. This will change the relation between body and machine, as we are increasingly becoming cyborgs with modular and modifiable bodies. This conception will change our morals about health and sickness. For example, we will become less tolerant of unhealthy people who don’t want to have their organs replaced by artificial disposable organs, and when it comes to decision-making, we will put more trust in algorithms and artificial intelligence (possibly even leading to a new form of religion and new ontologies).