The economic singularity is coming.
This is something I wrote about in the past. Over the years, my analysis of technology led me to the conclusion that we are closing in on a time when an economic boom will take place.
AI and robotics are going to stun people. While there are likely a host of societal issues that stem from this transition, one thing that is certain is we are going to see a boom to economic productivity. We can argue about who owns it, benefits, and how to alter this. That said, what is clear is that productivity is going to explode.
Western economies, or more accurately politicians, get excited when there is growth about 3%. The US registered 4.3% which was touted in every way.
Here is where Elon Musk enters. He made a claim that really caught my attention.
In this article we will look at the potential for double digit gains.
Elon Musk: Double Digit GDP Grow In 18 Months
What does double digit growth look like?
For those in the United States, we cannot picture this. The last time we saw numbers like that was right after WW2. Naturally, the economy was much smaller at that time. We are now dealing with a giant that is near $30 trillion.
The information I an using was pulled from this video:
Elon Musk is known for his aggressive forecasts. At the same time, he is often incorrect in his timing.
In spite of the headline on the video, we have one forecast to focus upon. Elon replied to a Tweet about GDP growth and he said double digits within 12-18 months. That would mean a 10% jump in the YoY growth rate.
To me, that seems too ambitious, at least in that time frame. We are looking at a few years before we can see that. I understand Elon's logic is tied to the massive expansion of data centers and how rapidly AI is accelerating.
While he definitely knows more than I do on the pace of things, my guess is he is discounting the slowness in the "world of atoms". GDP is made up of both the digital and physical world. The former is already skyrocketing. My challenge with this timeline is the fact we are looking at an economy that is still overwhelmingly based in atoms.
Economic Singularity
My prediction is we will see an economic singularity by 2035. I define this as a 30% (or greater) growth rate in GDP, while recognizing the flaw in this statistic. We can take solace in the fact it is somewhat offset by deflationary forces that come from technology.
Without getting hung up on the statistics, we have a situation where both Elon and I are predicting massive growth. As we see with the title, Elon is going on record with the assertion of 100% annual growth by 2030.
Consider what that means. Again, I might quibble with the time he puts forth but there is no doubt in my mind his trajectory is correct. Exponentials have serious impact. It is only a matter of determining where the trend line falls.
A 100% growth rate means we are seeing a doubling of the economy every year. I contest this view by 2030 because there is no way to build enough robots to achieve that end. It will take far longer than that.
Nevertheless, even if we use a 30% growth rate, that means the economy doubles in size every 3 years. By the end of a decade, we would see a greater than 8x on the economy. Using todays numbers of roughly $30T, that is a $240T after 10 years.
We could see how things get absolutely insane if we use the 100%.
Stepping back from the exact numbers, this is what should excite people. The ability to generate enormous economic output is quickly becoming a reality. Whether it take 1.5 year or 5, we can see how different things will be by the end of this decade.