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?

What is your estimate of how much of Hong Kong's current wealth and success it would preserve if it were unable to make use of technology developed after, say, 1990?

Two answers, under different assumptions about what you're asking. If HK had no post-1990 tech and neither did the rest of the world, then it would maintain about 95% of its wealth. If HK was stuck in 1990 tech while the rest of the world wasn't then it could maintain about 85% of its wealth - it would still be richer than most of Europe. If this seems high to you, consider that a basic idea of economics suggests that countries will use trade to make up for their relative deficiencies and maximize their comparative advantage, and HK is an global center of trade.