Explosion of innovation by the pandemic -AI’s intelligence is improving exponentially, and the cost is falling by a tenth every 12 months -
After Corona Innovation
The theme of this blog is ‘After Corona Innovation’. As the term suggests, we are at a turning point towards a new era after the pandemic of the novel coronavirus (COVID-19).
In the current situation of 2025, after the pandemic of COVID-19, it seems that there is an explosion of innovation in the fields of AI and robotics every day around the world.
According to Sam Altman’s blog, CEO of OpenAI, a company that is attracting attention in the AI industry, the current explosive innovation in AI can be expressed in the words ‘AI’s intelligence is improving exponentially, and its price is falling by a tenth every 12 months’. This means that, of all the tools that humanity has created so far, AI is undoubtedly improving in performance at the fastest speed, and at the same time, its cost is falling at the fastest speed.
It seems that the seeds of innovation that humanity has accumulated during the period since the Corona crisis has forced us into enclosed spaces are now all coming to fruition at once.
From a global perspective, not only OpenAI and Google, but companies all over the world are releasing new services in the field of AI every day, and not just chatbots — NVIDIA and Tesla are also releasing new models of vehicles and humanoid robots one after another.
The following is a graph showing the change in the number of AI-related research papers submitted worldwide. This data shows the explosive rate of innovation in the field of AI.
The Pandemic Accelerated the Complexity of Issues and the Evolution of Connectivity
The global spread of the coronavirus has increased the complexity of the issues facing our society. The spread of infectious diseases, economic stagnation, climate change, and social division. These issues are intertwined with each other, and present a complex picture that cannot be solved with a single solution.
However, the pandemic has also provided an opportunity to significantly change the way we connect as a human race. Looking back at history, past pandemics have physically separated people. The great plague in the Eastern Roman Empire once caused social chaos and deepened people’s isolation.
However, this pandemic was different. With the powerful tool of the internet, we were able to connect across physical distances and enable dialogue and collaboration on a global scale.
The number of new Zoom domains registered has increased rapidly since March 2020. On 22 April 2020, the number of Zoom meetings held in a single day reached an astonishing 300 million. This clearly shows that the pandemic has led to an explosion in online communication and a major change in the way people connect with each other.
Constraints are the source of innovation: ‘Creativity under constraints’
Interestingly, the article presents the paradoxical viewpoint that ‘constraints are necessary for innovation’. It quotes an interview with Paddy Miller, published in the Harvard Business Review, and introduces the phrase ‘focus trumps freedom’. Generally, it is thought that innovation is born from free thinking, but in reality, people are more likely to be creative in situations where there are constraints.
One example that symbolises this idea is the Apollo 13 mission, which in 1970 was faced with the crisis of an oxygen tank explosion on the way to the moon. In a desperate situation with limited resources, a harsh environment and time constraints, the astronauts and ground controllers saved the crew’s lives by making a makeshift air purifier out of materials they had on board. This miraculous episode is a perfect example of how ‘constraints give rise to innovation’.
According to research by Jacob Goldenberg and Drew Boyd of Columbia University, many of the most significant historical innovations have actually come about ‘within constraints’. After analysing over 400 cases of innovation, it became clear that major breakthroughs are born from thinking within the ‘frame’ of constraints. Indeed, inside-the-box thinking is the key to unlocking creativity.
A global discovery was born from the constraints of the plague and a long holiday
Newton’s ‘three great achievements’ were created during the 18 months he spent on holiday in his hometown, away from the ravages of the plague. At the time when Newton took a break from his studies, the plague was raging in London, and Newton was forced to seek refuge in a safe place. The time he spent alone between 1665 and 1666 became the foundation for his great discoveries, which would later be called the three great achievements of Newton, including the method of fluxions, optical theory and the law of universal gravitation.
It is said that all of the ‘three great achievements of Newton’ were conceived during the 18 months he spent on leave in his hometown, away from the plague.
The fact that Newton’s important achievements were proven in this short period of just six months is why this period is also called the ‘incubation of the different’ or the ‘creative leave’.
The COIVD-19 pandemic that gave rise to an exponential explosion of innovation — From BC (Before Corona) to AC (After Corona)
Before the pandemic (BC — Before Corona), small-scale innovation was occurring in a limited, closed environment for individuals and communities.
However, since the pandemic (AC — After Corona), communities have been connected through the internet, and interactions at a global level have been created.
This means that the potential for innovation has expanded dramatically. People with different cultures, different values and different skills are connecting online and sharing their knowledge, which increases the possibility of innovative ideas that were previously unthinkable. This can be described as the ‘possibility of an exponential explosion of innovation’.
This can be thought of as being connected to the global-scale innovation that is currently occurring in the fields of AI and robotics.
Historical comparison of infectious diseases and innovation: the birth of a new industrial revolution
History of innovation after each pandemic
Pandemics sometimes have a destructive effect on society, but at the same time they can also provide an opportunity for new innovation.
Innovation after the plague epidemic
The plague pandemic of the 14th century brought about major changes in European society. The plague was believed to be contagious even by merely nursing the sick or disposing of the bodies of the deceased, which led to people being divided and isolated in confined spaces for long periods of time.
Such a division of mankind led to a series of transformations that radically overturned the social structure of medieval Europe, including the collapse of feudal society, the rise of the Renaissance and the Reformation.
The spread of the plague also contributed greatly to the development of medicine. Progress was made in investigating the causes of infectious diseases and in preventative measures, and concepts such as quarantine and isolation were established as part of public health. In addition, the infrastructure of cities was improved, including the development of water and sewage systems.
On the economic front, the shortage of labour caused by the plague led to an increase in wages, and this in turn led to the liberation of serfs and the development of the woollen textile industry, stimulating new economic activity.
The invention of printing
The invention of movable type printing by Johannes Gutenberg around 1450 had a major impact on European society after the Black Death. Movable type printing made it possible to mass-produce books, compared to the handwritten copies that had been used up until then, and contributed to the spread of knowledge and education. The spread of the Bible also helped to promote the development of the Reformation and led to a change in people’s way of thinking.
Innovations after the smallpox epidemic
Smallpox, which raged in the 18th century, led to the development of the first vaccine for humans. Edward Jenner noticed that people who had been infected with cowpox did not contract smallpox, and in 1796 he carried out the world’s first vaccination. This was a landmark event in the history of medicine, and had a major impact on subsequent vaccine development. Smallpox vaccines spread around the world, and in 1980 the WHO declared smallpox eradicated.
Innovation after the Spanish Flu Epidemic
The 1918 Spanish Flu epidemic was a wake-up call for the importance of public health, and led to a review of health systems in various countries. The establishment of the League of Nations Health Organization (LNHO) and other developments also led to the creation of international health cooperation systems. In many countries, public healthcare systems were improved, and the status of health ministries was also raised.
In terms of medical research, technological innovations that were useful for combating infectious diseases progressed, including the development of techniques for isolating and cultivating viruses and artificial synthesis systems. In addition, the elucidation of the genome information of the Spanish flu virus led to progress in research on the pathogenicity of viruses.
On the economic front, the importance of measures to control the spread of infection was recognised, and research progressed on the impact of policies such as city lockdowns on the economy. For example, cities that implemented measures to control the spread of infection early and on a wide scale tended to have lower mortality rates and higher rates of increase in manufacturing employment.
Automobile industry
The Spanish flu epidemic may also have had an indirect impact on the development of the automobile industry. At the time, many workers were absent from work at large-scale automobile factories, causing operational problems. From this experience, companies recognised the importance of employee health management, and began to work on improving the hygiene environment in factories and promoting the health of employees. This is thought to have led to improvements in productivity and working conditions in the automobile industry in later years.
The major innovation in car production during this period was the mass production method for cars pioneered by Ford, typified by the Model T Ford. Until then, cars had been produced in a way that was similar to handicraft production, but the adoption of automated equipment such as conveyor belts made it possible to supply them to the market at very low cost. As a result, cars spread rapidly throughout the world.
In Japan, it was around this time that the forerunner of today’s Toyota Motor Corporation, Toyoda Automatic Loom Works, was founded. This is a good example of how the social restrictions brought about by the pandemic ended up supporting the rapid growth of new industries.
The electrical industry
At the time of the Spanish flu pandemic, the electrical industry was still in its infancy, but it can be said that the pandemic had a significant impact on it. In the record industry, production came to a standstill due to factory shutdowns and employee absenteeism. In addition, with the closure of theatres and other entertainment facilities, people began to enjoy music at home, and there was a rise in demand for gramophones and records.
Matsushita Electric Works, the predecessor of the current Panasonic, was founded by Konosuke Matsushita, and at the time, it was common for Japanese houses to have only one electric line, but he developed a two-way socket that could branch off the electric line.
At the time, most households had a ‘one-house, one-light’ contract with the power company. This meant that when the light was on, it was not possible to use electrical appliances at the same time, which was inconvenient. This is where the two-way socket came in. The two-way socket was a revolutionary product at the time, as it split the electricity supply into two, allowing people to use both the light and electrical appliances at the same time.
This two-way socket became a boom in Japan, and was the catalyst for the foundation of Matsushita Electric.
The two-way socket, which was a major success when Panasonic was first established, is the predecessor of the current Panasonic.
Innovation after the coronavirus pandemic
The pandemic of the new coronavirus has accelerated the digitisation of society. Non-contact services such as teleworking, online classes and online medical consultations have rapidly become widespread. In particular, the evolution of AI and RoboTech, which implements AI, has accelerated explosively.
The performance of AI is increasing exponentially, while costs are falling by a tenth every 12 months
To get an idea of the explosive pace of innovation currently taking place in AI, I would like to refer you to the blog of Sam Altman, who is a representative of a leading company in the field of generative AI. In his latest blog, he expresses the speed of the evolution currently taking place in AI in this way
Quote -
1. The intelligence of an AI model is roughly equal to the logarithm of the resources used to train and run that model. These resources are primarily training compute, data, and inference compute. It seems that spending any amount of money will yield a continuous and predictable return. The scaling laws that predict this are accurate over many orders of magnitude.
2. The cost of using a particular level of AI is dropping by about a tenth every 12 months, and the price drop is leading to more use. This can be seen in the token cost from GPT-4 at the beginning of 2023 to GPT-4o in mid-2024. The price per token dropped by about 150 times over this period. Moore’s Law has doubled the world every 18 months, but this is far more powerful.
End of quote
As you can see from this blog, the performance of the tools created by humanity is improving exponentially at the fastest speed ever, and at the same time, the price is decreasing by a tenth in 12 months, which is the fastest speed of any innovation created by humanity, leading to disruptive innovation.
The relationship between pandemics and innovation
Looking back at the history above, we can see that there is a close relationship between pandemics and innovation. Pandemics bring about major changes in society, transforming people’s values and behaviour patterns.
For example, the cholera epidemic of the 19th century raised awareness of cleanliness and led to improvements in hygiene practices. In addition, the pandemic of the new coronavirus has increased demand for contactless services and accelerated digitisation.
Pandemics create new needs and highlight issues that cannot be addressed by existing technologies and social systems. To solve these issues, new technologies and services are developed and implemented in society, which promotes innovation.
In particular, after the plagues, Spanish flu and coronavirus pandemics, there were major changes in social structure, economic activity, medical technology and people’s values, and it can be said that innovations were born in response to each of these.
Economic historians such as Mokhova have pointed out that national crises have given rise to private sector innovation. When companies face a crisis such as a pandemic, they have the potential to create new innovations through entering other industries or collaborating with other companies.
Mechanisms by which pandemics promote innovation
The following points can be considered as mechanisms by which pandemics promote innovation.
- Constraints: A pandemic creates a sense of crisis throughout society, and changes people’s awareness and behaviour. As a result, people become more motivated to solve new problems, and innovation is promoted. As the case of Apollo 13 shows, innovation is very likely to occur under constraints, where people are isolated and confined to a limited environment and have to spend a certain amount of time there.
- Changing needs: Pandemics change people’s lifestyles and values, giving rise to new needs. New technologies and services are developed to meet these needs.
- Changing social structure: Pandemics bring about major changes in social structure and economic activity. As a result, issues that cannot be addressed by existing systems come to light, and the construction of new systems and technological innovation are required.
- Concentration of resources: In response to the pandemic, governments and companies will invest heavily in research and development and the development of social infrastructure. As a result, innovation will be accelerated.
- Promotion of international cooperation: The pandemic is a threat that transcends national borders, and it will reaffirm the importance of international cooperation. The explosive innovation in the field of AI that has occurred since the pandemic is the result of international cooperation being implemented using the technology of the internet. As a result, international research and development and technological exchange are promoted, and innovation is accelerated.
The fifth wave predicted by Kondratieff’s wave: the rise of AI and robotics
I would like to try to interpret the innovation that is occurring explosively after the pandemic from another perspective. Here, I would like to focus on the theory of economic cycles known as Kondratieff’s wave.
The Kondratieff wave is a theory of long-term economic cycles proposed by the Russian economist Nikolai Kondratieff. It is said that the economy grows significantly at intervals of around 40 to 60 years, triggered by technological innovation and the development of new infrastructure, and then goes into a period of stagnation or decline, repeating this cycle.
- Wave 1 (late 1780s to early 1850s): steam engine, spinning
- Second wave (early 1850s to 1890s): steam, railways, steel
- Third wave (1890s to around 1920s): cars, electricity
- Fourth wave (1940s to 2020s): electronics, IT (definition by author)
- Fifth wave (2020s onwards?): AI, robotics (definition by author)
Within this Kondratieff wave, the first wave is defined as the Industrial Revolution brought about by the steam engine, and the next wave was the rise of the path industry, which saw the development of various devices using steel and steam engines. The third wave was the rise of the automobile and electrical industries, which lasted for 53 years. The fourth wave was the rise of the electronics and IT industries.
For example, technological innovations such as the spread of steam engines and railways, the invention of electricity and the automobile, and the advent of computers and the internet are thought to be factors that create new waves.
The mechanism of the rising and falling phases of Kondratieff’s waves
Kondratieff’s waves repeat a rising phase and a falling phase at intervals of around 50 years.
The upturn period is a period of sustained economic growth, during which new technological innovations emerge and spread throughout the economy, leading to increased productivity, employment and investment. During this period, industries related to new technologies grow, and wages also rise.
The downturn period is a period of slow growth, when the spread of technological innovations reaches saturation point. During this period, overproduction and a decrease in investment occur, making it easy to fall into a recession. It is also thought that the risk of social unrest and international conflict will increase. The periods of long-term waves based on prices are said to be 60 years for the first wave and 47 years for the second wave, with the periods of increase being 25 years and 23 years respectively, and the periods of decrease being 35 years and 23 years respectively. Furthermore, if we use 2020 as the dividing line for the fourth wave, it will have been 47 years since the previous wave.
The length of the Kondratieff waves is not exactly 50 years, and it is generally accepted that it varies between 40 and 70 years. In addition, in the modern era, where the pace of innovation is accelerating, such as with the technological innovation of AI, it has been pointed out that the cycle tends to shorten.
Theoretical background of Kondratieff waves
In order to understand the Kondratieff waves, it is important to understand the related economic theory. Here, we will explain the theory of innovation.
Theory of innovation
Kondratieff waves are closely related to the theory of innovation, which states that technological innovation is the driving force behind economic growth. Joseph Schumpeter argued that innovation by entrepreneurs is the key to economic development, and he explained Kondratieff waves as business cycles driven by technological innovation.
The fifth wave, which occurred around 2020 after the pandemic, was clearly caused by the technological innovation of AI, so an explanation based on innovation theory makes the most sense.
Conclusion: What is required in the greatest era of innovation in human history?
We can understand that the essence of ‘post-corona innovation’ is to aim to create new value by taking advantage of the restrictions imposed by the pandemic. Constraints stimulate creativity, the internet enables global collaboration, and people’s values are shifting towards self-transformation and social transformation.
We are now at a historic turning point. Just as past pandemics have given rise to new industries and technologies, this pandemic too has the potential to bring about major changes in the way we live, work and think, and in our values. The key to surviving in the future is to not be afraid of constraints or change, but rather to see them as opportunities and actively create innovation.
‘After Corona Innovation’ may not be just a temporary buzzword, but a compass that will help us to shape the future.
In this way, in the era of After Corona Innovation, where innovation is progressing at the fastest speed in human history, what is it that humans are required to do?
At the Zenschool, an innovation school for the AI era that we have been running for 14 years since 2011, we provide a place to cultivate the ability to ‘form questions’ as a skill that is required of humans in this era. If you are interested, we would be happy if you could contact us here.
Write with Gemini 2.0 and Chat GPT o3
