Exponential: Order and Chaos in an Age of Accelerating Technology

by Azeem Azhar

The economy of the machine age was dominated by things you could stub your toe on. Cars, washing machines, telephones, railway lines – for centuries, the most important products were built in the physical world. And the companies that supplied these products were the corporate titans of their time. You could work out a company’s value by focusing on the land and buildings it owned, the machines in its factories, and the stocks of products waiting to be sold. This physical stuff is known as a company’s ‘tangible assets’. In the Exponential Age, value is rather more nebulous. Many of today’s firms do not get their value from the physical products they move around. That is not to say that during the Exponential Age companies won’t build physical things. Hugely expensive, customised factories to build semiconductors are clustering in high-tech areas; shallow seas with stable, strong wind patterns are being populated with grids of titanic windmills. But the true source of these companies’ profits is more ethereal. The software that runs Google’s search engine, the data that represents the network of friends in Facebook, the designs and brand identity of Apple, the algorithms that recommend your evening’s viewing on Netflix – this is where their true value lies. Economists call these non-physical assets ‘intangible’.22 The speed of the shift to intangible assets has been remarkable. In 1975, about 83 per cent of the market value of companies on the Standard and Poor 500 stock ma...