Technology Could Cause a Transformational Acceleration in Economic Growth

Since 1 AD, history reveals distinct time periods during which the rate of economic growth has transformed structurally—as shown below. Over each successive time span the underlying rate of economic growth has structurally changed for the better. One can measure this change either by the average yearly growth rate or, as in our case, by calculating how long it would take for the world’s production to grow tenfold. In simpler terms, how many years will it take for us to be ten times wealthier?

Sources: ARK Investment Management LLC, 2024, based on data from Bolt et al. 2022; Nalley et al. 2021; DeLong 1998; The World Bank Group, as of 01/27/23.³ Numbers are rounded. Consensus forecast is the reference economic case for the EIA’s International Energy Outlook. X-axis of log years until 2050 is tuned to the best fit against the historical data. Forecasts are inherently limited and cannot be relied upon. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security or cryptocurrency. Past performance is not indicative of future results.

During the first thousand years AD, technology breakthroughs—including the development of the waterwheel and advanced infrastructure enabled by concrete—catalysed activity to such an extent that real GDP would have increased 10x over the course of 16,500 years. Through 1500, agricultural innovation, notably the introduction of a plow able to work heavy European soils, improved food protection, boosting growth to a rate that would have multiplied real GDP 10-fold over 1,600 years. During the Enlightenment and first industrial revolution, economic growth was driven by the introduction of the steam engine, taking the amount of time for a 10x improvement in real GDP down to 720 years. Then, the internal combustion engine, the telephone, electrification, and the railroad combined to create another structural shift during the second industrial revolution, pushing the 10x increase in GDP down to 150 years. Finally, in the second half of the 20th and early 21st centuries, the integrated circuit, personal computers, and the internet combined to compress the 10x increase in economic well-being as measured by real GDP into fewer years than the average human lifespan: 65.

In the chart above, the green dots highlight the growth trajectory that consensus forecasting agencies are predicting. Knowingly or not, they are implying that the innovation enabled by robotics, energy storage, artificial intelligence, blockchain technology, and multiomics sequencing will not impact growth meaningfully and that the global economy is entering a rendition of the dark ages.