If I were asked to name one simple misconception that has been responsible for more confusion, wrongheadedness, false-prophecy and malinvestment than any other, it would be this: the widespread assumption that, when something new comes along which shows promise, that thing will grow exclusively at the expense of some other vaguely similar thing which preceded it.
There are times when this happens, of course. You don’t see many Hansom Cabs on the streets of London; very few business travellers choose to cross the Atlantic by ship. However, innovations such as the internal combustion engine and the jet aircraft are spectacularly rare. Most innovation works by accretion and recombination rather than replacement.
Quite often what are assumed to be competitive goods turn out to be complementary. It was widely assumed that the arrival of the home VCR would spell the death of the movie theatre (and with it, presumably, the popcorn industry). In fact, the opposite happened. Seen with hindsight, as one Hollywood commentator remarked, the video-rental market reawakened the public’s interest in major feature films: as such it worked like a sampling campaign for cinema. Your consumption of home movies counterintuitively increased your appetite for visiting your local Odeon.
The real and the digital are often highly complementary
A few people say that, given advances in telepresence and videoconferencing, we should delay investment in new runway capacity for London’s airports. I might suggest the opposite: that it is the very improvements in these technologies which make investment in runway capacity more urgent. My power to hold regular face-to-face meetings with my colleagues in Chicago or Shanghai will increase the number of multinational projects on which I work. As a direct consequence, the frequency with which people ask me to come to Shanghai to attend a two-day meeting in order to gladhand a few local bigwigs will go up and not down.
The real and the digital are often highly complementary in this way. E-commerce has been a boost for the world’s postal services in a way that few predicted; never mind parcels and packages, I would predict that even flat mail volumes may increase over the next ten years. Music downloads seem to have grown in step with a huge growth in people’s appetite for live music (despite the surge in piracy, the music industry in aggregate is worth more now than it was 20 years ago).
I admit that I have often been wrong about this myself. When the internet first came along, I assumed that large cities would slowly wither, since it would be possible for people to work from anywhere. In fact, the opposite has happened: we are seeing the rise of the megacity. Since the people with whom we do business are now more dispersed, it becomes more and more important to be based in one of those few global hubs where you can also reasonably expect to meet them in person from time to time. Much as I would like to move to Porto, a more connected world actually makes this more difficult. (London is probably a greater hub in this respect than any other city in the world: anyone of any importance in any field – from hip hop to global banking to behavioural psychology – will spend a few days in London every 18 months. He or she may never visit Porto in their lifetime).
And this same network effect applies to events. The single, annual mega-event is becoming the equivalent of the megacity. In my own industry, it is the Cannes Advertising Festival. Try as I sometimes do to skip this for a year, I can’t. The same must apply in other industries: MIPCOM, Comdex, 3GSM and so forth. If you own the leading conference in any specific field, you are sitting on a goldmine. The connectivity made possible by electronic technology increases the need for everyone in a field to assemble in one place at one specific time. Digital connectivity and face-to-face contact are complementary goods.
And I’ll end with one further reason never to predict the demise of any seemingly traditional technology. It’s a phenomenon called the Lindy Effect and it originates with an interesting finding that the best way to predict the future survival of any Broadway show is to see how long it has been running already. It is generally best to assume that every show is in the middle of its run.
Hence as Nassim Taleb avers in his book Antifragile, it is always a good rule to assume that everything that has been around for a long time in the past will be around for a long time to come. Age-old practices, like business meetings, events and congresses, should be assumed to have a long future precisely because they are so old.
I am writing this on a brand new train running on a railway line built in 1851. According to the Lindy Effect, my best prediction is that this railway line will survive to 2173.
Rory Sutherland is technology correspondent for The Spectator, an advertising copywriter and vice chairman of Ogilvy & Mather UK.