Accelerating Technological Advancement

Two “laws” help explain the extraordinary changes wrought by the global adoption of the internet. The first is Moore’s Law, named for Gordon Moore, an Intel cofounder. In the 1960s, he observed that the number of transistors that could be squeezed into a single chip was increasing at a predictable rate—doubling about every eighteen months. Thanks to billions of dollars in R&D and engineering investment, that rate of improvement has held ever since.

The second law is named after Bob Metcalfe, the inventor of Ethernet, one of the protocols foundational to the internet. Metcalfe posited that the value of a network is equal to the number of connections between users, not just the number of users. Bigger is better, and better, and better.

These laws help us quantify something we can see in our online experience: both the power of our devices and the value of the network they’re attached to are millions of times greater than they were at the dawn of the internet era. Plotting this growth reveals an interesting twist, however. For the past thirty years, the value of the internet as described by Metcalfe’s Law has increased more than processing power has improved. But as internet penetration slows, so does the rate of increase in the value of the internet. Meanwhile, Moore’s Law chugs along, suggesting that we may be approaching an inflection point, when changes to our online experience are driven more by technological advancement than by the ever-growing number of online connections.

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Moore’s and Metcalfe’s Laws

Indexed, 1990 = 1 (log scale)

Sources: World Bank, Prof G analysis.