The future is nearly here. “Technologies that used to seem like science fiction are becoming everyday reality,” write the co-authors of The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (New York: W. W. Norton, 2014). In their New York Times best seller, Erik Brynjolfsson and Andrew McAfee make the case that technological advances will reshape the global economy just as steam power did beginning in the 18th century.
“As the majority of economic activity becomes digitized, it will be a fundamentally different kind of world. I’m not talking a century from now; it’s a world our children will be living in,” says Brynjolfsson, the Schussel Family Professor of Management Science at MIT Sloan. When the second machine age really gets rolling, says McAfee, principal scientist at the MIT Center for Digital Business, “people will be freed from want, drudgery and toil — not just us in the rich world, but everywhere.”
The authors predict we will soon witness an unprecedented level of integration of machine intelligence into human affairs, from autonomous vehicles and responsive smart homes to robots in hotels and hospitals, and even to creative services such as writing. Unimaginable opportunities for innovation will transform virtually all sectors of the economy.
“The second machine age will wire up all geeks in the world to each other, and to the sum total of the world’s data,” says McAfee. “In fact, in the next decade, the majority of the world’s people will be networked with a device we know as a computer, and I have a happy enough view of human nature to think it’s a good development.”
Computers and other digital technologies that seemed for decades laughably bad at such tasks as interacting with humans suddenly began improving over time, the authors say. Exponential growth and diminishing costs of sensors, storage capacity, computing, and connection speeds, and the digitization of content from pretty much everywhere has brought the rapid diffusion of digital information and communication technologies into all spheres of life.
“Machine learning has grown leaps and bounds in just the past few years,” says Brynjolfsson. IBM’s precisely engineered program Watson astonished in 2011 when it sifted through reams of information to triumph on the game show Jeopardy. But new artificial intelligence “not only learns the rules on its own but masters its environment,” says McAfee. This will have profound implications for applications involving image, language, and speech recognition. “Teams of humans and machines are coming together to make things they couldn’t before,” Brynjolfsson says.
But Brynjolfsson and McAfee note that while a digital, networked economy will yield unanticipated paths for creating value and boosting productivity, it can also bring immense job loss and economic disenfranchisement. The web-based photosharing platform Instagram, created by 14 people, approached a $1 billion valuation nearly overnight. Almost as quickly, the legacy photography company Kodak, employer of 145,000, collapsed. A tech skills-biased economy dramatically generates winners and losers.
“Ultimately, it’s a much bigger pie, with more wealth, and less need for work,” says Brynjolfsson. “If that isn’t good news, shame on us.” To help ensure that as many people as possible share the bounty of this new economy, Brynjolfsson and McAfee have recently launched the MIT Initiative on the Digital Economy, an effort to train the Institute’s multidisciplinary talent on problems and policies including productivity, employment and inequality, big data, and the impact of technology on political mobilization. “I’m a mindful optimist,” says Brynjolfsson. “If we make an effort to reinvent our institutions, it will turn out well.”