The Power of New Technologies: What History Has Taught Us So Far

If you couldn’t join us for our inaugural Hungry Counsel AI Summit in London last October, fear not, we’re bringing you round ups of the key sessions. 

This article is a summary of the main points from Ben White’s session which left the audience with a lot of food for thought and inspiration. Ben White is the founder of Crafty Counsel, “the UK’s most dynamic and fast-growing legal Community”. Ben brought a fascinating perspective on how history shapes our understanding and reception of technological change.

 Is AI just another fad that will flop?

A lot of people are skeptical about AI. Some say, "First, I was told to learn to code; then smart contracts were the next big thing; after that, no-code was the future. Gen AI? Just another fad."

This response is understandable. Ben points out that humans are notoriously bad at predicting the impact of new technologies. We tend to either overestimate their immediate effects or grossly underestimate their long-term potential. Looking to the past, we see plenty of lessons that can guide us as we consider AI’s transformative power today.

Technologies we overestimated

Not every "revolutionary" technology lives up to its promise. A few examples:

1. The Segway: In 2001,  Jeff Bezos touted the segway as revolutionary, a game-changer. Steve Jobs said it could be bigger than the personal computer. Despite these endorsements, the Segway failed to transform urban transportation and was quietly discontinued in 2020.
2. Non-Fungible Tokens: Just two years ago, NFTs were making headlines as the future of digital ownership. Some Bored Ape NFTs traded for upwards of $429,000. Yet today, many NFTs have lost 90% or more of their value and are seen as speculative bubbles.

These examples remind us that hype often overshadows reality. AI, like the Segway or NFTs, risks being overhyped in the short term. But does that mean we should dismiss it entirely? Not so fast.

Technologies we underestimated

1. Mobile Phones: In the 1980s, AT&T were big on landlines, and they consulted McKinsey about whether they should get into the market for mobile phones. McKinsey predicted there would be 900,000 mobile phone users globally by 2000. AT&T, unconvinced that this was a big enough opportunity, stayed focused on landlines. By 2000, there were 40 million mobile phones in the UK alone, with billions globally.
2. The Internet: A lot of very smart people thought that the hype around the internet was overblown. “It’s too clunky, and people enjoy going to bookshops; it’s not going to work,” critics said.  

Both examples show how technologies that seem niche or impractical at first can become essential. Could AI follow a similar trajectory?

Technologies that seemed to flop, then bounced back higher than ever

Some technologies seem to fail, only to rise from the ashes stronger than ever:

Take video games, for example…

In 1983, the video game industry experienced a catastrophic crash. Atari buried 700,000 unsold cartridges of its failed E.T. game in the New Mexico desert. By 1985, U.S. video game revenues were a tenth of what they had been in 1983. Industry analysts declared gaming a passing fad.

Yet today, gaming is a juggernaut, generating more revenue than the global film industry. What appeared to be a failure was simply a market recalibrating before explosive growth.

The great manure crisis of 1894

History also teaches us about how technological solutions can unexpectedly solve even the most daunting challenges.

In 1884 London, the great horse manure crisis was a big deal. The streets were filled with an immense amount of horse manure, the stench of which was absolutely overwhelming. The horse population had grown so much that the infrastructure of dealing with all this horse crap could not keep up. 

Don’t be a horse

People thought this was the end of cities, because there were too many horses and too much horse manure. The thought that they had capped out at what humanity could do in an urban setting. However, they were looking at it from the wrong perspective. Yet, by the early 1900s, horse carriages had been largely replaced by cars. The introduction of this new technology changed people’s behavior practically overnight, and certainly rendered the manure crisis moot. 

This shift underscores the human capacity to adapt rapidly to new technologies. But it also serves as a warning: the car solved one problem but introduced others, such as pollution and traffic. Similarly, AI will solve many challenges while creating new ones.

Adapting to large-scale change 

The story of Hermès provides a fascinating blueprint for adapting to technological disruption. Founded in 1837 as a maker of high-quality harnesses and saddles, Hermès thrived in the horse-drawn carriage era. But as cars replaced carriages, the demand for horse-related goods plummeted.

Rather than doubling down on their existing market or pivoting entirely to transportation, Hermès chose a third path: luxury. Over the 20th century, the company expanded into handbags, clothing, and silk scarves. Today, Hermès is one of the world’s most valuable luxury brands.

This ability to pivot offers a lesson for businesses navigating AI: Focus on your core strengths while exploring adjacent opportunities.

All things considered, how do we feel about AI then?

Looking back through history, we’ve seen that we tend to both overestimate and underestimate the transformative power of new technologies. We’re rarely spot on predicting their true impact. We also tend to get very worried about what these potential changes mean for us. Sometimes, we focus too much or too little on negative externalities. In the case of AI, we hear a lot about energy, pollution, and the demands of data centers; these are real, significant issues that shouldn’t be dismissed. 

However, as humans, we’re also prone to solving problems and moving on very quickly. It may well be that we find ways to definitively move on from the real challenges we’re facing on energy usage and its negative externalities (in the same way that we dealt with the manure crisis of 1894 – which hardly anyone talks about anymore!). 

AI will change the way we live and work; we just can’t, with certainty, predict by how much and in what way. Perhaps it’s by being human, by using and embracing this technology, that we can create more opportunities for the things that we really enjoy about our jobs: not grunt work, but fostering community, exercising our curiosity, and empowering our imagination. 

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