Second Machine Age: Who Will Lose, Who Will Benefit
Jul 13, 2014 12:47:40 GMT 5.5
via the ProBoards App
Post by Thoithoi O'Cottage on Jul 13, 2014 12:47:40 GMT 5.5
By Erik Brynjolfsson, Andrew McAfee, and Michael Spence
Random excerpt from July/August 2014 Issue of Foreign Affairs.
Some have argued that the current era of rapid technological progress serves labor, and some have argued that it serves capital. What both camps have slighted is the fact that technology is not only integrating existing sources of labor and capital but also creating new ones.
Random excerpt from July/August 2014 Issue of Foreign Affairs.
Some have argued that the current era of rapid technological progress serves labor, and some have argued that it serves capital. What both camps have slighted is the fact that technology is not only integrating existing sources of labor and capital but also creating new ones.
Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation. Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.
...
Digital technologies increasingly make both ordinary labor and ordinary capital commodities, and so a greater share of the rewards from ideas will go to the creators, innovators, and entrepreneurs. People with ideas, not workers or investors, will be the scarcest resource.
...
Even as the globalization story continues, however, an even bigger one is starting to unfold: the story of automation, including artificial intelligence, robotics, 3-D printing, and so on. And this second story is surpassing the first, with some of its greatest effects destined to hit relatively unskilled workers in developing nations.
Visit a factory in China’s Guangdong Province, for example, and you will see thousands of young people working day in and day out on routine, repetitive tasks, such as connecting two parts of a keyboard. Such jobs are rarely, if ever, seen anymore in the United States or the rest of the rich world. But they may not exist for long in China and the rest of the developing world either, for they involve exactly the type of tasks that are easy for robots to do. As intelligent machines become cheaper and more capable, they will increasingly replace human labor, especially in relatively structured environments such as factories and especially for the most routine and repetitive tasks. To put it another way, offshoring is often only a way station on the road to automation.
...
What will be the scarcest, and hence the most valuable, resource in what two of us (Erik Brynjolfsson and Andrew McAfee) have called “the second machine age,” an era driven by digital technologies and their associated economic characteristics? It will be neither ordinary labor nor ordinary capital but people who can create new ideas and innovations.
Such people have always been economically valuable, of course, and have often profited handsomely from their innovations as a result. But they had to share the returns on their ideas with the labor and capital that were necessary for bringing them into the marketplace. Digital technologies increasingly make both ordinary labor and ordinary capital commodities, and so a greater share of the rewards from ideas will go to the creators, innovators, and entrepreneurs. People with ideas, not workers or investors, will be the scarcest resource.
...
Even as the globalization story continues, however, an even bigger one is starting to unfold: the story of automation, including artificial intelligence, robotics, 3-D printing, and so on. And this second story is surpassing the first, with some of its greatest effects destined to hit relatively unskilled workers in developing nations.
Visit a factory in China’s Guangdong Province, for example, and you will see thousands of young people working day in and day out on routine, repetitive tasks, such as connecting two parts of a keyboard. Such jobs are rarely, if ever, seen anymore in the United States or the rest of the rich world. But they may not exist for long in China and the rest of the developing world either, for they involve exactly the type of tasks that are easy for robots to do. As intelligent machines become cheaper and more capable, they will increasingly replace human labor, especially in relatively structured environments such as factories and especially for the most routine and repetitive tasks. To put it another way, offshoring is often only a way station on the road to automation.
...
What will be the scarcest, and hence the most valuable, resource in what two of us (Erik Brynjolfsson and Andrew McAfee) have called “the second machine age,” an era driven by digital technologies and their associated economic characteristics? It will be neither ordinary labor nor ordinary capital but people who can create new ideas and innovations.
Such people have always been economically valuable, of course, and have often profited handsomely from their innovations as a result. But they had to share the returns on their ideas with the labor and capital that were necessary for bringing them into the marketplace. Digital technologies increasingly make both ordinary labor and ordinary capital commodities, and so a greater share of the rewards from ideas will go to the creators, innovators, and entrepreneurs. People with ideas, not workers or investors, will be the scarcest resource.
. Now, I don't have to spend the rest of my life trying to (re-)invent the microphone, ignorant of its existence there already 
. Hats off to Sverker Johansson.