PREDICTIONS – 10 Years Later - Santa Fe Institute

2. NEEDLES IN A HAYSTACK
looks like a decaying exponential, reaching a minimum final value when
the costs can be reduced no further. It turns out that this curve is our
familiar S-curve in disguise.
The performance/price indicator mentioned previously follows S-
curves according to a logistic function. The mathematical expression of
this function is a simple fraction that has a constant in the numerator and
a constant plus a decreasing exponential in the denominator (see Appendix
A). Therefore, its inverse, namely price/performance, is simply a
constant plus an exponential. In this form, it says that for one unit of
performance the price decreases with time down to a final value, beyond
which no further decrease is possible. This conclusion based on
units of performance can be reproduced by analogy for units of sales.
In other words the volume curve, representing costs per unit, is nothing
else than the inverse of the S-shaped learning curve, representing
units per dollar. Businesspersons using volume curves for decades have
been dealing with S-curves without realizing it. The fundamental process
is learning. It can take the form of an S-curve for the variable
MIPS/$ or look like a decaying exponential for its inverse, $/MIPS. In
either case the law that governs its evolution is natural growth under
competition.
GOING WEST
Collective learning by a body larger than a company or an organization
is behind such social endeavors as explorations. The great explorers acquired
knowledge about remote exotic places and people, about a whole
new world, and about how the earth is round, how to cross the ocean,
and how to deal with new types of hardship, diseases, diets, and violence.
Later on all of this was recorded in encyclopedias, textbooks, and
scientific manuals. Oddly enough, however, the people who carried out
the explorations were not men of science or intellectual pursuits. On the
contrary, learning was the least of their concerns.
Why then did they feel compelled to do it, and who was behind the
learning process?
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