We recently attended the New Telecosm Summit, which was the latest in a series of Telecosm Conferences inspired by the vision set forth by author and thinker George Gilder. This year's event took place on December 3rd and 4th in New York City.
The concept of the "telecosm" refers broadly to the world unleashed by abundant information-processing capability coupled with abundant networking capability: the technologies which make information processing and sharing so inexpensive and plentiful that massive amounts of high-definition video data can be shared almost anywhere, even while mobile (not requiring people to use devices that are tethered to the network by a physical cord).
The possible applications for such super-abundance are literally unlimited, since the human imagination is essentially unlimited, and we have all seen the impact of the creative applications that people have found for these new capabilities over the past ten or fifteen years, and the ways they have transformed numerous aspects of human life. These transformations, and the technology that makes them possible, constitute the concept of "the telecosm."
This year's Telecosm conference featured talks on the progress of this paradigm, and some of its far-reaching ramifications as we can envision them today, as well as presentations by some of the individuals and companies who are working on ways to apply the capabilities of the telecosm to different areas of human life (including medicine), or on ways to expand those capabilities to new heights.
Of course, event chairman and Telecosm pioneer George Gilder gave the opening keynote, and during his remarks he laid out the powerful vision that he believes underlies the entire paradigm. He notes that the incredible advances in information processing and information sharing on global networks during the past several decades was made possible by the "information theory" articulated primarily by Claude Shannon, who declared (in George's words during the talk) that "information itself is surprise, and creativity is surprise."
This concept underlies the inevitable gravitation of information towards the electromagnetic spectrum, because the waves of energy in the electromagnetic spectrum behave in a very unsurprising and predictable way, making them an ideal carrier for information (unexpected blips in the predictable spectrum can then be used to carry coded information, in just the same way that puffs of smoke signals against a clear sky can be used to carry coded information).
George then explained how this concept has ramifications that go to the heart of the profound question of how economies grow and how innovation and creativity can flourish (these are both the same question, of course). Most of those who have tried to examine this question of how to enable innovation, creativity and growth have focused on incentives of some sort, whether those incentives came in the form of government "stimulus" (a typically "Keynesian" or "demand-side" approach) or in the form of reducing penalties or obstacles to growth such as taxes or regulations (the typically "supply-side" approach), but George explained that the application of Claude Shannon's information theory to this question came as an epiphany to him, and enabled him to see that innovation and creativity are actually forms of surprise, and therefore forms of information!
This insight enabled him to see that a healthy economy that enables the always-surprising creativity and innovation of individuals is really a knowledge system (because it is based on information), rather than an incentive system, in which those in power try to provide incentives to behavior as if they were guiding a chicken in a Skinner Box. George explains that trying to manipulate humans using the Skinner Box method has failed miserably, but that by realizing that knowledge accumulates in very specific ways, and by seeing the economy as a knowledge system or a learning system, we find an entirely new perspective that has not been appreciated before.
"A learning system operates differently from an incentive system," he said in his talk. Specifically, learning and knowledge are accumulated through a series of "falsifiable experiments" -- and in the world of business innovation this means a series of "entrepreneurs creating falsifiable experiments" that may succeed or they may not.
George develops this important new approach to understanding creativity, innovation, and economic growth in his most recent book, Knowledge and Power.
Unfortunately, the temptation of those in power is and has always been to interfere with the critical series of "falsifiable experiments," by picking winners and losers. One of the sub-themes of the conference this year was the degree to which the unpredictability and interference introduced by government officials and their cronies in various areas of business has created major disruptions to the promise of innovation and creativity over the past two decades.
Thus, this year's Telecosm presented a tempered message that was balanced between the promise of innovation and creativity -- which in many ways have reached tremendous heights -- and the caution and uncertainty which still threaten both the telecosm and the wider economy. We believe these concepts are very important for investors (and all participants in the economy and wider society) to understand and consider carefully.