Predictions for 2023
Being intellectually honest about the future
Predictions are a fascinating thing. You try to take in all you know about the world and the event you are considering to make a bet on what you think will happen. Surprisingly or not, a lot of people are bad at making predictions. Nassim Taleb would say it’s because they don’t have skin in the game. Others might say it’s because people don’t reflect on their decisions or aren’t held accountable to them. What I find interesting is that predictions are what machine learning practitioners have learned to do well at scale. We have developed frameworks for testing, verifying, and reassessing our models to make sure the correctness of predictions keeps improving. I also think that’s why the field has progressed so quickly. There are clear benchmarks for people create models to beat and then they keep one-upping each other to get better performance. Just like a leaderboard.
I recently came across a site called Metaculus that aims to aggregate predictions on the future. It is a bit of a prediction market but geared toward a wider array of predictions for which it is easy to assess the outcome of. Metaculus also scores people and holds them accountable to their predictions by making their history available. To be clear, I don't think anyone can fully predict the future (that can devolve into philosophy on determinism) but practice is very good for sharpening your thinking. Reflecting and being held accountable for predictions improves your decision making over the long term. In that spirit, I’d like to provide my predictions for 2023, starting first with the major trends driving those predictions.
Five major drivers
When I think about the coming year, there are five main drivers that will influence the coming year of 2023. These trends feed on each other. The trends I think that are in play with along some assessment of how they will affect the world are as follows:
Growing isolationism: As the amount of volatility increases in the world, the desire for control will increase. This shifts the focus internally instead of externally, for both countries and individuals. I would expect discussions to include more alignment with self sufficiency, and potentially, for trade to slow down.
Rising tensions between US and China: If you’ve spoken with me, you know that I’m in general agreement with Ray Dalio that the US is on a collision course for war with China. While I don’t think we are quite there yet, I expect a lot more positioning, preparation, and hawkish language.
Increasing climate volatility and miscalculated risk: It’s well documented that climate volatility is increasing, which results in more extreme events. What is less well understood is that most planning involving climate relies on using normal distributions. However, as the number of extreme events increases, these normal distributions either widen or change shape altogether. Think of the number of times you’ve heard the term 100-year storm in the past few years. As the planning distributions and actual event distributions diverge, the probability for a system failure increases non-linearly.
AI embedded into everything: AI will find a way to be embedded into everything. As people realize the power of ChatGPT and its successors, they will want to embed this technology into a majority of devices to make them more interactive and lively. I plan to write on this aspect at a later point.
Greater focus on energy: I think the war in Ukraine was a wake up call for many on the importance of having sufficient sources of energy. Most people take for granted the core civil infrastructure that helps keep our lives running until those systems fail or stop working. The above four points increase the need for energy, either through energy independence or from energy hungry systems. I anticipate more funding and allocation to energy and energy systems in 2023.
Predictions
Based on the five major trends above, I think the following events will happen.
Increasing number of sanctions on China: I predict the US to come out with several anti-China policies and sanctions to put economic and technological pressure on China in the hopes of staving off a war.
Onshoring in Mexico: As tensions rise between the US and China and people realize the lack of robustness in some of the current supply chain setups, I anticipate more manufacturing moving to Mexico instead of China where labor costs are lower and there is less shipping risk.
Major breakthroughs in biotech due to AI: As AI becomes embedded into everything, most people will be focused on chat assistants. However, I predict that under the radar will be major biotech breakthroughs occurring due to the use of AI. This may be new devices, molecules, delivery systems, or discovery of mechanisms of action. Given the current existence of AlphaFold, I would expect no fewer than 3 major breakthroughs.
VC Generative AI Hype: Based on the current excitement around ChatGPT, I believe that generative AI startups will have the largest amount of VC funding in 2023. This will ultimately lead to a bubble in the space that will burst in 12-24 months because most startups will not be positioned correctly.
Generative AI will cause a political disaster: Due to the widespread use of generative AI, I predict that there will be a political disaster caused by the use of generative AI. This is likely some form of false content that most people are led to believe is true.
Regulation clampdowns on AI: There is a growing feeling of concern around the power of big tech and AI within government. I believe this fear will cause a regulatory crackdown on AI and tech in general. I’m not sure what that means for the ecosystem yet but it will result in the need for a zero trust framework for AI. WeChat has already banned the use of ChatGPT on its platform.
Increase in happiness due to AI: I think the happiness rating of many countries that have access to advanced generative AI systems will increase as people find ways to use AI to provide companionship, inspiration, and remove annoying aspects of work.
Extreme weather event: Due to the increasing climate volatility, I predict there will be an extreme heat event that results in the deaths of thousands of individuals. This will most likely occur in the Global South.
Shift from lowering emissions to focus on adaptation and resiliency: I predict that this year there will be a realization that without fast action, we will not be able to hit the 2 degree celsius limit of the Paris Agreement. This inability to hit the target will shift focus from emission reduction technology to those that enable adaptation and resiliency. While I do not hope for this outcome, I believe it is more likely than not.
Rogue Geoengineering: With people becoming more desperate to try to stop climate change, I think there will be individuals not associated with a government that start live experimenting with geoengineering. Neal Stephenson illustrated a potential scenario for this in his book Termination Shock.
Those are my predictions for 2023. I’ll revisit these predictions at the end of 2023 to see how I did. I welcome any feedback or to hear your own predictions for the new year. Happy New Year!