The Onrushing Wave

Douglas_Reay

There's a long article in this week's The Economist:

The onrushing wave

discussing the effect of changing technology upon the amount of employment available in different sectors of the economy.

Sample paragraph from it:

The case for a highly disruptive period of economic growth is made by Erik Brynjolfsson and Andrew McAfee, professors at MIT, in “The Second Machine Age”, a book to be published later this month. Like the first great era of industrialisation, they argue, it should deliver enormous benefits—but not without a period of disorienting and uncomfortable change. Their argument rests on an underappreciated aspect of the exponential growth in chip processing speed, memory capacity and other computer metrics: that the amount of progress computers will make in the next few years is always equal to the progress they have made since the very beginning. Mr Brynjolfsson and Mr McAfee reckon that the main bottleneck on innovation is the time it takes society to sort through the many combinations and permutations of new technologies and business models.

(There's a summary online of their previous book: Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy)

What do people think are society's practical options for coping with this change?

There's a long article in this week's The Economist:

The onrushing wave

discussing the effect of changing technology upon the amount of employment available in different sectors of the economy.

Sample paragraph from it:

The case for a highly disruptive period of economic growth is made by Erik Brynjolfsson and Andrew McAfee, professors at MIT, in “The Second Machine Age”, a book to be published later this month. Like the first great era of industrialisation, they argue, it should deliver enormous benefits—but not without a period of disorienting and uncomfortable change. Their argument rests on an underappreciated aspect of the exponential growth in chip processing speed, memory capacity and other computer metrics: that the amount of progress computers will make in the next few years is always equal to the progress they have made since the very beginning. Mr Brynjolfsson and Mr McAfee reckon that the main bottleneck on innovation is the time it takes society to sort through the many combinations and permutations of new technologies and business models.

What do people think are society's practical options for coping with this change?

My view of the US is that we've experienced a rapid uptake in technology alongside serious decline in institutional quality, and these two effects have more or less cancelled each other out, so that the well-being of people in the US is about unchanged over the last 1-2 decades.

I would say that we have had modest technological progress and modest institutional decline. Progress has been overwhelmingly localized in IT/telecom/computers. We've seen small improvements in other areas.

It might seem like this would produce a wash in standard of living, but since we've also seen huge increases in inequality, standard of living for the bottom 75-90% of people is falling.