Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy
Erik Brynjolfsson, Andrew McAfee
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• Why has median income stopped rising in the US?
• Why is the share of population that is working falling so rapidly?
• Why are our economy and society are becoming more unequal?
A popular explanation right now is that the root cause underlying these symptoms is technological stagnation-- a slowdown in the kinds of ideas and inventions that bring progress and prosperity.
In Race Against the Machine, MIT's Erik Brynjolfsson and Andrew McAfee present a very different explanation. Drawing on research by their team at the Center for Digital Business, they show that there's been no stagnation in technology -- in fact, the digital revolution is accelerating. Recent advances are the stuff of science fiction: computers now drive cars in traffic, translate between human languages effectively, and beat the best human Jeopardy! players.
As these examples show, digital technologies are rapidly encroaching on skills that used to belong to humans alone. This phenomenon is both broad and deep, and has profound economic implications. Many of these implications are positive; digital innovation increases productivity, reduces prices (sometimes to zero), and grows the overall economic pie.
But digital innovation has also changed how the economic pie is distributed, and here the news is not good for the median worker. As technology races ahead, it can leave many people behind. Workers whose skills have been mastered by computers have less to offer the job market, and see their wages and prospects shrink. Entrepreneurial business models, new organizational structures and different institutions are needed to ensure that the average worker is not left behind by cutting-edge machines.
In Race Against the Machine Brynjolfsson and McAfee bring together a range of statistics, examples, and arguments to show that technological progress is accelerating, and that this trend has deep consequences for skills, wages, and jobs. The book makes the case that employment prospects are grim for many today not because there's been technology has stagnated, but instead because we humans and our organizations aren't keeping up.
other hard-to-measure aspects of output. While bushels of wheat and tons of steel are relatively easy to count, the quality of a teacher’s instruction, the value of more cereal choices in a supermarket, or the ability to get money from an ATM 24 hours a day is harder to assess. Compounding this measurement problem is the fact that free digital goods like Facebook, Wikipedia, and YouTube are essentially invisible to productivity statistics. As the Internet and mobile telephony deliver more and
macro-markets. Technology scholar Thomas Malone calls this the age of hyperspecialization. Digital technologies make it possible to scale that expertise so that we all benefit from those talents and creativity. Investing in Human Capital Technology races ahead ever faster as we move deeper into the second half of the chessboard. To keep up, we need not only organizational innovation, orchestrated by entrepreneurs, but also a second broad strategy: investments in the complementary human
cutting-edge technologies. Although the United States once led the world in the education of its citizens, it has fallen from first to tenth in the share of citizens who are college graduates. The high costs and low performance of the American educational system are classic symptoms of low productivity in this sector. Despite the importance of productivity to overall living standards, and the disproportionate importance of education to productivity, there is far too little systematic work done to
Civil Engineers gives a grade of D to our overall infrastructure at present. Improving it will bring productivity benefits by facilitating flow and mixing ideas, people, and technologies. It will also put many people to work directly. You don’t have to be an ardent Keynesian to believe that the best time to make these investments is when there is plenty of slack in the labor market. 11. Increase funding for basic research and for our preeminent government R&D institutions including the
computers are encroaching into territory that used to be occupied by people alone, like advanced pattern recognition and complex communication, for now humans still hold the high ground in each of these areas. Experienced doctors, for example, make diagnoses by comparing the body of medical knowledge they’ve accumulated against patients’ lab results and descriptions of symptoms, and also by employing the advanced subconscious pattern recognition abilities we label “intuition.” (Does this patient