Andy Groves, the former CEO of Intel, describes strategic inflection points as points at which a business transitions from the old state of affairs to a new one. These states are often a company’s response to what he calls “10x changes” in one or more of the key forces that impact its business.
The world has faced many 10x changes since the end of the Cold War. Nowhere is this more apparent than in the area of technology in which observed trends in accelerating advances are now described as “laws.” The most famous of these is undoubtedly Moore’s law, which states that the number of transistors that can be placed inexpensively on an integrated circuit doubles every two years. Moore’s law has inspired a cottage industry of sorts in producing new technology “laws”:
disk-storage density doubles every 12 months (Kryder’s law)
bandwidth to high-end home users doubles every 21 months (Nielsen’s law)
the amount of data coming out of an optical fiber doubles every nine months (Butter’s law)
the amount of available DNA-sequence data doubles every 18 months (observed, but awaiting someone to attach a name) (Bio Economic Research Associates, 2007)
The United States no longer has a corner on the market in technology. In fact, we are now a net importer of technology products, and these advances are available globally (NSF, 2008). These trends inspired Thomas Friedman (2005) to write the bestseller, The World Is Flat, in which he asserts that the diffusion of accelerating technical advances around the globe is creating the ultimate level playing field.
Our friends and adversaries around the world now have access to the same powerful technical capabilities we do. Armed with these new capabilities, small groups and individuals now have the wherewithal to threaten even the mightiest of nations. Consider the impact of the 19 men on September 11 who used modern aviation technology against us. They not only killed thousands of Americans, but also drove our country to spend nearly $1 trillion in response. The amount we have spent on the Iraq and Afghanistan wars already exceeds the amount we spent on Viet Nam, even when adjusting for inflation (Stiglitz and Bilmes, 2008).
Although our national security operations are running at an exceedingly high tempo, I believe the government transformation we need to succeed in the “flat world” is near paralysis. In some sense, this is understandable. Andy Groves (1999) describes this same condition in companies facing strategic inflection points: