How predictable is technological progress

By J. D. Farmer, Doyne Farmera, François Lafonda, François Lafond, Christopher L. Smith, J. Alstott, M. Totten. 2015

251 citations recorded by the source corpus.

Abstract Recently it has become clear that many technologies follow a generalized version of Moore's law, i.e. costs tend to drop exponentially, at different rates that depend on the technology. Here we formulate Moore's law as a correlated geometric random walk with drift, and apply it to historical data on 53 technologies. We derive a closed form expression approximating the distribution of forecast errors as a function of time. Based on hind-casting experiments we show that this works well, making it possible to collapse the forecast errors for many different technologies at different time horizons onto the same universal distribution. This is valuable because it allows us to make forecasts for any given technology with a clear understanding of the quality of the forecasts. As a practical demonstration we make distributional forecasts at different time horizons for solar photovoltaic modules, and show how our method can be used to estimate the probability that a given technology will outperform another technology at a given point in the future.

Subfields: Finance, Management Science and Operations Research, Safety, Robustness & Interpretability

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Citations in the corpus

When Will AI Exceed Human Performance? Evidence from AI Experts (2017, background): “While individual breakthroughs are unpredictable, longer term progress in R&D for many domains (including computer hardware, genomics, solar energy) has been impressively regular [15].”
The future cost of electrical energy storage based on experience rates (2017, unknown): “TCO = (Capex − RV (1 + r)N ) CRF + 1 N ∑ Opex (1 + r)n Mileage (6)”
Net-zero emissions energy systems (2018, background): “In some cases, innovation and deployment can be expected to reduce costs and create new options (32, 73, 105, 106).”
The Paris Agreement and the new logic of international climate politics (2016, background): “The cost of photo-voltaic modules has fallen by an average rate of about 10 per cent per year since 1980, 18 and the fall in solar energy prices has speeded up more recently as China has ramped up solar-cell production from 50 megawatts of generation capacity in 2004 to 23,000 megawatts in 2012.”
A Third Wave in the Economics of Climate Change (2015, background): “An even bigger problem is that different technologies have very different rates of improvement, and most existing models fail to employ empirically grounded methods for forecasting the progress of different technologies (Farmer and Lafond 2015).”