Book: The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies

This book by Erik Brynjolfsson and Andrew McAfee has three broad conclusions:

  • There has been incredible progress in digital technologies. While computer technology is not entirely new, it has taken time to hit its stride. Software, data analytics, sensors, and computational power has come together and progressed to a place where digital technologies are causing a societal and economic inflection point (beyond the historical rate of progress).
  • Transformations brought by digital technologies will be profoundly beneficial to society. The future will bring vast increases in consumption of information and entertainment; digital goods are abundant rather than scarce. Technological progress is also improving the physical world through improved efficiency and quality of products and services.
  • The digitalization of the future is going to bring many challenges. Rapid technological progress will likely bring economic disruption, with computers becoming more powerful companies will need less of certain types of workers. It is possible that many people will be left behind by the new economy and this will bring increased wealth discrepancies. Certain workers with special skills, knowledge, or creativity can become ‘rockstars’ and create incredible value that can be spread through digitalization that scales incredibly. However, this reduces the value of others who are not among this small group as it is impossible to compete with pure labour hours.

While there are great opportunities for this second machine age of digital technologies and computerization, it is important to discuss the likely negative consequences. The book offers a series of policy suggestions for how government and society can plan and react to the future disruption to mitigate economic hardship.