Summary: It’s not too soon to prepare your 2014 reading list. Today we have an excerpt from what might be one of the most important books of the year, about a trend which will drive events in the 21st century — the next wave of automation. AKA the rise of smart machines, the next industrial revolution. Distributing its fruits might be the defining political challenge for each society, with almost unimaginable rewards for nations that do so peacefully.
- The Book
- Excerpt: about the next Age
- About the authors
- For More Information
(1) The Book
The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee (2014) — “Work, Progress, and Prosperity in a Time of Brilliant Technologies”
A revolution is under way.
In recent years, Google’s autonomous cars have logged thousands of miles on American highways and IBM’s Watson trounced the best human Jeopardy! players. Digital technologies — with hardware, software, and networks at their core — will in the near future diagnose diseases more accurately than doctors can, apply enormous data sets to transform retailing, and accomplish many tasks once considered uniquely human.
In The Second Machine Age MIT’s Erik Brynjolfsson and Andrew McAfee—two thinkers at the forefront of their field — make the case that we should be optimistic about the future because technological progress, ‘the only free lunch that economists believe in,’ is accelerating quickly past our intuitions and expectations. But we should also be mindful of our values and our choices: as technology races ahead, it may leave a lot of people, organizations and institutions behind.
This is the book that explains the new age we’re quickly heading into and shows why we should be optimistic about it, yet also discusses the challenges it will bring.
(2) Excerpt from Chapter One
This work led us to three broad conclusions.
The first is that we’re living in a time of astonishing progress with digital technologies — those that have computer hardware, software, and networks at their core. These technologies are not brand-new; businesses have been buying computers for more than half a century, and Time magazine declared the personal computer its “Machine of the Year” in 1982.
But just as it took generations to improve the steam engine to the point that it could power the Industrial Revolution, it’s also taken time to refine our digital engines. We’ll show why and how the full force of these technologies has recently been achieved and give examples of its power. “Full,” though, doesn’t mean “mature.” Computers are going to continue to improve and to do new and unprecedented things. By “full force,” we mean simply that the key building blocks are already in place for digital technologies to be as important and transformational to society and the economy as the steam engine.
In short, we’re at an inflection point — a point where the curve starts to bend a lot — because of computers. We are entering a second machine age.
Our second conclusion is that the transformations brought about by digital technology will be profoundly beneficial ones. We’re heading into an era that won’t just be different; it will be better, because we’ll be able to increase both the variety and the volume of our consumption.
When we phrase it that way — in the dry vocabulary of economics — it almost sounds unappealing. Who wants to consume more and more all the time? But we don’t just consume calories and gasoline. We also consume information from books and friends, entertainment from superstars and amateurs, expertise from teachers and doctors, and countless other things that are not made of atoms. Technology can bring us more choice and even freedom.
When these things are digitized — when they’re converted into bits that can be stored on a computer and sent over a network — they acquire some weird and wonderful properties. They’re subject to different economics, where abundance is the norm rather than scarcity. As we’ll show, digital goods are not like physical ones, and these differences matter.
Of course, physical goods are still essential, and most of us would like them to have greater volume, variety, and quality. Whether or not we want to eat more, we’d like to eat better or different meals. Whether or not we want to burn more fossil fuels, we’d like to visit more places with less hassle. Computers are helping accomplish these goals, and many others. Digitization is improving the physical world, and these improvements are only going to become more important. Among economic historians there’s wide agreement that, as Martin Weitzman puts it, “the long-term growth of an advanced economy is dominated by the behavior of technical progress.” As we’ll show, technical progress is improving exponentially.
Our third conclusion is less optimistic: digitization is going to bring with it some thorny challenges.
This in itself should not be too surprising or alarming; even the most beneficial developments have unpleasant consequences that must be managed. The Industrial Revolution was accompanied by soot-filled London skies and horrific exploitation of child labor.
What will be their modern equivalents? Rapid and accelerating digitization is likely to bring economic rather than environmental disruption, stemming from the fact that as computers get more powerful, companies have less need for some kinds of workers. Technological progress is going to leave behind some people, perhaps even a lot of people, as it races ahead.
As we’ll demonstrate, there’s never been a better time to be a worker with special skills or the right education, because these people can use technology to create and capture value. However, there’s never been a worse time to be a worker with only ‘ordinary’ skills and abilities to offer, because computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.
Over time, the people of England and other countries concluded that some aspects of the Industrial Revolution were unacceptable and took steps to end them (democratic government and technological progress both helped with this). Child labor no longer exists in the UK, and London air contains less smoke and sulfur dioxide now than at any time since at least the late 1500s.
The challenges of the digital revolution can also be met, but first we have to be clear on what they are. It’s important to discuss the likely negative consequences of the second machine age and start a dialogue about how to mitigate them—we are confident that they’re not insurmountable. But they won’t fix themselves, either. We’ll offer our thoughts on this important topic in the chapters to come.
So this is a book about the second machine age unfolding right now — an inflection point in the history of our economies and societies because of digitization. It’s an inflection point in the right direction — bounty instead of scarcity, freedom instead of constraint — but one that will bring with it some difficult challenges and choices.
(3) Reviews (will be updated)
- “3 key ideas from what will be one of the most important books of 2014“, James Pethokoukis, American Enterprise Institute, 27 December 2013
(4) About the authors
About Erik Brynjolfsson (@erikbryn):
- Professor at the MIT Sloan School of Business, the Director of the MIT Center for Digital Business, and a Research Associate at the National Bureau of Economic Research (NBER).
- His research and teaching examines the effects of information technologies on business strategy, productivity and employment.
- His recent work studies data-driven decision-making and the role intangible assets.
- Brynjolfsson is a director or advisor for several technology-intensive firms and lectures worldwide on technology and strategy.
About Andrew McAfee (@amcafee):
- He is a principal research scientist at MIT, where he studies how digital technologies are changing business, the economy, and society.
- He coined the phrase “Enterprise 2.0” in a Spring 2006 Sloan Management Review article to describe the use of Web 2.0 tools by businesses (ungated copy here).
- This was further developed in his book Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges (2009).
- Read his widely-followed blog for more about these important matters.
- See his articles at the Harvard Business Review website.
(5) For More Information about the robot revolution
(a) Dynamics of the robot revolution
- The coming big increase in structural unemployment, August 2010
- The coming Robotic Nation, 28 August 2010
- The coming of the robots, reshaping our society in ways difficult to foresee, 22 September 2010
- Economists grapple with the first stage of the robot revolution, September 2012
- The coming big inequality. Was Marx just early?, 27 November 2012
(b) First signs of the robot revolution appear
- The Robot Revolution arrives & the world changes, Apr 2012
- In Friday’s job report you’ll see early signs of the robot revolution!, 5 December 2012
- Krugman discovers the Robot Revolution!, 9 December 2012
- How do we respond to the Robot Revolution?, 11 December 2012
- 2012: the year people began to realize the robots are coming, 3 January 2013
- Journalists reporting the end of journalism as a profession, 19 March 2013
- The next step of computer evolution: becoming bloggers, 20 March 2013