Gordon Moore, co-founder of Intel and a towering figure of the early semiconductor business, died earlier this year at the age of 94. He leaves behind one of the more successful companies in history and, of course, his famous Moore’s law.
He predicted in 1965 that the density of transistors on a microchip would double every year and adjusted his forecast in 1975 to “just” doubling every two years. The latter projection has held true for nearly 50 years.
It’s often said that the phones in our hands have more computing power than the 1969 Apollo moon mission. That’s true, but it’s also a vast understatement — our phones actually have more power than all of NASA at the time, a fact that demonstrates the shocking reality of exponential change.
We, humans, tend to think in linear terms: If things grew a bit last year, they’ll grow a bit more this year. It’s hard for us to grasp what happened with semiconductors. In 1971, there were around 2,400 transistors per microprocessor. Fifty years later, a chip holds 58 billion transistors, and Intel intends to make it 1 trillion by 2030. If something doubles every two years, it grows roughly 30 times per decade, 1,000-fold in 20 years, and 1 million times in 40 years. In 60 years, you’ll get something 1 billion times faster.
It’s hard to overstate what this speed of change has wrought on the world. At the fun end of things, my teenage boys are utterly unimpressed that they can look up nearly any fact or stream any video or song nearly instantly. At the same time, misinformation can travel much faster. As for AI? It will get rapidly better at both the good and the bad. (Look up “deep fakes” if you want to be scared.)
Moore’s law has also led to some of the most classic failures in business history. Kodak didn’t get ready for digital photos. Blockbuster was blindsided as well, as downloading a movie went from impossible to a real-time capability in just a handful of years. Once streaming movies became a trivial act, the rent-a-video model was dead.
In all of this, I see two critical lessons. First, we can make remarkable progress if we enable early success, believe much more is possible, compete like crazy to do it, and invest what’s necessary. The core point here is that, to state the obvious, Moore’s law is not a law. Nobody mandated the big chip companies to cut the width of a transistor down to the nanoscale over decades. They did so because of competition, massive public and private spending to build markets for chips, and impressive levels of innovation in theories, manufacturing technologies, device design, and marketing. (Did we need iPads once they were feasible?) Moore’s law proved to be a powerful and bold prediction of what an industry could accomplish, based on early experience and success.
Second, we can draw parallels to the critical business challenge of our times: how to thrive and grow while managing our social and environmental impacts (especially climate change). We can embrace rapid change to operate in a sustainable or net-positive way.
We Can Embrace the Exponential Again
Like in the 1960s and ’70s, once again we’re barreling down a path we’re not sure how to travel, driven by external goals — most importantly, how fast science tells us the world should decarbonize. “Science-based targets” are a quasi-Moore’s law for fighting climate change. Keeping up with these aggressive targets is an important creator of business value, a path to excellence in innovation and performance, and a core way to stay relevant to customers, employees, and other stakeholders (and not get Blockbuster-ized).
So far, many clean technology sectors are doing a good impression of the semiconductor world. The cost of clean power and battery storage has been, if not halving every two years, still declining very quickly. According to the International Energy Agency, the cost per watt of new solar modules dropped 96% between 2000 and 2020. Over 45 years, solar costs have plummeted 500-fold, halving roughly every five years. While not the pace of Moore’s law, it’s been plenty fast enough to shake up entire sectors and create vast new opportunities. The cleantech transition is a multitrillion-dollar shift in how we travel, build buildings, make things, and much more.
Like with semiconductors, this performance in the cleantech sector has come from a combination of innovation, investment, policy support, and the massive build-out of manufacturing capacity at scale (mainly in China). But perhaps most important in both cases is that the pace of change has required willpower and new mental models. When those of us in the sustainable business world started pushing the idea of science-based targets 10-plus years ago, the pushback was palpable. “How could we possibly move that fast?” many would ask. “Why would we move that fast, given how much it costs?” But scepticism flips to enthusiasm when you cross cost and mental tipping points.
As powerful as Moore’s law has been in driving deep technological and social change in society, again, it was a man-made goal. Companies were driven to move toward it by competition, innovation, and profit motivations. This time, with climate objectives, we’re using global planetary thresholds to shape the goals on how fast we need to go — not just with carbon but with water use, the amount of toxics or plastics in the environment, the prevalence of human rights abuses in supply chains, and more.
These are not nice-to-haves if we want our world to thrive. The sustainability “laws” we’re grappling with are decidedly not theoretical or invented — they’re based on the laws of nature and physics. Smart companies will see these nonnegotiable realities as the incredible opportunity that they are and get moving.
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