We tend to overestimate the effect of technology in the short run and underestimate the effect in the long run.
New groundbreaking technologies often get hyped up way too soon only to then get underestimated dramatically.
The impact of technologies like computers or the internet were drastically overestimated for the first couple of years after their inception — only to then drastically outperform all expectations and to create unseen world-changing impact at scale.
(The Gartner Hype Cycle is a model that draws on Amara's Law and applies it to businesses and organizations.)
During the early years of new technologies, both practitioners in the fields as well as observers like journalists or investors extrapolate from early success stories and impacts linearly into the future. This ignores that for technologies to really take off at scale, many more problems than in the beginning have to be solved. Overestimation of impact is the result.
However, over a longer period, exponential growth of knowledge and capabilities as well as network effects create novel areas of application and unforeseen use cases — which can lead to a much greater-than-anticipated adoption of a technology. Huge shifts in markets and usage behavior can follow and, as a result, technologies dominate more than ever expected before.
"We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run."
— Roy Amara
- A great essay about Amara's Law and how it relates to exponential growth and increasing returns on development can be found at Farnam Street.
- For an interesting take on the history of Amara' Law and hype cycles related to it, check out Matt Ridley's blog post.
- For a refresher on the massive power of exponential growth, check out this previous MindVault idea.
A few further resources you might like if you find above idea interesting:
- 📚 James Dale Davidson's The Sovereign Individual: Mastering the Transition to the Information Age
- 📚 Yuval Noah Harari's Homo Deus: A Brief History of Tomorrow
- 📚 Matt Ridley's The Rational Optimist