The Second Machine Age
Updated: Feb 4, 2021
Internet 1.0 and 2.0
The internet has changed our world. Industry after industry has been transformed – the list is endless with travel, financial services, publishing, retailing being just a few examples of
dramatic change over the past few decades. We started with internet 1.0 encompassing web sites and communications and then graduated to version 2.0 with the advent of self-publication (e.g. blogs and Wikipedia) and collaboration (e.g. trip advisor).
However rather than the pace of change slowing it is in fact accelerating – and we are entering a paradigm shift as simultaneously the power of computing increases and its cost decreases exponentially. Combine this with the emergence of ubiquitous communications and big data through the digitisation of everything and you have a potent cocktail for change.
This book is a real eye opener bringing into the open the fundamental changes which are going on around us and making us aware of their implications.
The authors start off by demonstrating that what we thought to be impossible just a few years ago in terms of computing has become reality. Examples are driverless cars, machines controlled by normal speech, computer champions in the realms of chess and jeopardy.
The authors then highlight how the continuing decrease in the cost of computing power, the digitisation of everything, and the ability to communicate data have created fertile conditions for exponential growth in the knowledge driven economy. Indeed the difference between the physical economy and the digital economy is that in the digital world resources are not consumed - rather ideas can be used again to create even more ideas and innovations.
They go on to explore what this might mean for employment - will machines take many of the jobs away from humans. They argue that there will be shifts in the nature of employment with some jobs being taken by machines but that programming and maintaining the machines will be a source of new employment - but in smaller numbers. In addition, the digital economy is producing many billionaire entrepreneurs. Even if not be billionaires it is creating the opportunity for successful digital entrepreneurs to make significant fortunes. In turn this leads to an ever increasing concentration of wealth in society - a trend well documented by academics such as Thomas Pikerty in Capital in the 21st Century (see previous book review). The authors ask the question if this is sustainable in the long term - and if not what policy stances might be needed to redress the balance.
In the final phase of the book the authors end on a positive note having observed that whilst we have created machines that can play chess better than any human - that the new chess champions are now humans combined with the machine. The human brings creativity, strategy, and innovation - the machine brings the processing power to work through millions of possibilities in real time. They argue that it is man augmented by machines that will bring us technological advancement and economic growth - and that the rate of improvement will grow exponentially as we go deeper and deeper into the second machine age.
This is a must read book - it will change your view of the world.