“Race Against The Machine: How The Digital Revolution is Accelerating Innovation, Driving Productivity and Irreversible Transforming Employment and The Economy”
by Erik Brynjolfsson and Andrew McAfee
The authors based this article on their book entitled The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. When I checked on 3/8/17, it had 4.5 Amazon stars based on 510 customer reviews.The article points out that while other measures of economic health have rebounded quite well since the official end of the Great Recession in June, 2009, employment has lagged. The authors make a strong case for the slow growth in employment being due to technological advances outpacing labor’s ability to adjust to such advances.
They point to two related concepts. First is Moore’s Law, named after Gordon Moore, co-founder of Intel who said back in 1965 that computing power will double every 12 months. (History has shown that the doubling occurs closer to every 18 months.)
The second concept is the power of exponential series, as demonstrated by an ancient story which I will let the authors tell in their own words:
“….the inventor of the game of chess shows his creation to his country’s ruler. The emperor is so delighted by the game that he allows the inventor to name his own reward. The clever man asks for a quantity of rice to be determined as follows: one grain of rice is placed on the first square of the chessboard, two grains on the second, four on the third, and so on, with each square receiving twice as many grains as the previous. The emperor agrees, thinking that this reward was too small. He eventually sees, however, that the constant doubling results in tremendously large numbers.”
The inventor winds up with 9,223,372,036,854,775,808 grains of rice (i.e. 263), on the 64th square alone. If you sum the number of grains of rice on all 64 squares, you get a very large number of grains of rice. (precisely 18,446,744,073,709,551,615 grains of rice). If placed end to end and assuming each grain of rice is .2 inches long, all the rice would stretch approximately 60,000,000,000,000 miles which is twice as far as the nearest star (Alpha Centauri which is 25,000,000,000,000 miles from Earth). This is a great illustration of how an exponential series accelerates with each term. That is what is happening with technology. We are in the equivalent of the second half of the chess board.
Experts have shown that computers should reach the physical limits of Moore’s Law sometime in the 2020s. If the limit is reached in 2028, that is the equivalent of the 64th square on the chess board. But whenever the limit is reached is beside the point. Technology has dramatically changed our lives up to now and will continue to do so in an even more dramatic fashion over the next few decades.
The authors conclude that in order to keep up with the rapid change in technology, improvements need to be made in two areas: (a) improving the rate and quality of organizational innovations and (b) increasing human capital.
Another way of expressing this goal would be that we need to focus on (a) entrepreneurship and (b) education. I completely agree on the entrepreneurship part but think that the education part needs some clarification. There are several existing jobs that will be performed by the computers and robots in the future. Other existing jobs will become more important. Plus new jobs will be created. We need to educate young people so as to prepare them for the future jobs which will exclude many of the existing jobs.
Math, entrepreneurship, communication, leadership and marketing are the core areas that will only become more important for humans in the future, in my opinion.
Jobs for Humans 