The Second Machine Age: Avoiding the Dark Side of the Digital Revolution

Erik Brynjolfsson has some suggestions for avoiding the negative economic impacts of automation

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Stephen Cass: Historically, technological innovation has been the most reliable foundation of improved standards of living around the world. Despite dismal beginnings, the Industrial Revolution ultimately created a huge rise in the income of workers, which in turn permitted huge improvements in nutrition, sanitation, health care, and education. Electrification then accelerated these industrial trends, allowing for safer and cleaner factories and homes.

My guest today, director of the MIT Center for Digital Business, Erik Brynjolfsson, and his coauthor, Andrew McAfee, also at the MIT Center for Digital Business, refer to the automation of physical labor begun by steam power as the first machine age. Their latest book, The Second Machine Age, explores the impacts of the recent acceleration in the automation of mental labor due to digital technology, and how we might avoid having technology, for the first time, lead to long-term reductions in the quality of life for a significant portion of the population.

Erik, welcome to “Techwise Conversations.”

Erik Brynjolfsson: It’s a pleasure to be here.

Stephen Cass: Digital technologies have been widespread for at least three decades, with personal computers starting to proliferate in homes and offices in the 1980s. Why do you think we’ve reached some sort of inflection point in digital technology in recent years?

Erik Brynjolfsson: Well, part of it is just looking around us. Just recently I got to ride in a self-driving car. I now routinely speak to my machines, and they understand what I’m saying and carry out my instructions and sometimes speak back to me in a simulated voice. We’ve had machines that not only beat us at chess and other games but are handling very unstructured questions like the IBM supercomputer did in the game of “Jeopardy!” All these developments have been fairly recent, and they reflect an inflection point—a really steep increase in the power of computers’ ability to handle all sorts of tasks that could never have been done before.

Stephen Cass: About two years ago, we had Andrew McAfee on “Techwise Conversations” about your earlier book on this topic, Race Against the Machine, which introduced the idea that technology could increase inequality by eliminating many jobs that were once bulwarks of the middle and working classes. The Second Machine Age appears to be more optimistic, despite inequality continuing to increase since then. Why the change in tone?

Erik Brynjolfsson: Well, I think a lot of the facts are similar to what we said before, but we, in this book, lay out a set of approaches and solutions that we think will help address the concerns and the risks that technologies bring along. We have three chapters of recommendations for individuals, for policymakers, for executives, and we’re hopeful that we will take on this challenge like we did in the first machine age to not simply sit back and let technology do things to us, but use technology to make a better world.

Stephen Cass: Last year, we interviewed Jaron Lanier, who feels that the vast amount of uncompensated user-generated content for the benefit of a few entrepreneurs is leading to the dismemberment of the middle class. Why are you upbeat about this kind of free content?

Erik Brynjolfsson: Well, free content is wonderful because it gives us—improves our living standards in many ways that aren’t measured. And in my research at MIT with some colleagues, we’ve identified about $300 billion worth of increased consumer surplus each year due to Wikipedia, apps on the iPhone, Google, Facebook, lots of other applications. Just because they’re not measured in GDP doesn’t mean they’re not helping us. They are.

Now, Jaron is right. We have had some real challenges to the middle class. Middle class incomes have fallen compared to those higher up in the spectrum, and even where they were 10 or 15 years ago. That’s a challenge we have to take on, but the problem is not that we have a lot of free goods.

Stephen Cass: Another naysayer we interviewed last year was Peter Cappelli, who wrote Why Good People Can’t Get Jobs, in which he talks about companies’ unwillingness to help people train for high-tech skills. What’s your response to his concerns about the future of work?

Erik Brynjolfsson: Well, I share a lot of his concerns, and I think that one of the most important things we can do is double and redouble our investments in training at K-12, higher education, lifelong learning, vocational training—all these areas need more investment. But it’s not enough to simply invest more. We have to reinvent how we do education. Digital technologies can help with that. We need to rethink the kinds of education we’re providing as well. Creativity and interpersonal relations will be much more important going forward because rote following of instructions and routine knowledge are things that machines are very good at and will be less important in the second machine age.

Stephen Cass: What else do you and Andrew recommend for dealing with the downsides of the digital revolution?

Erik Brynjolfsson: Well, certainly education is a big one. Another is doing more to boost entrepreneurship. Now, that’s not because all those people who’ve lost their jobs to machines are going to go out and hang their shingle and become entrepreneurs. It’s because we need to invent new industries, new jobs, new occupations, new services, to replace the ones that have been automated away and that machines are now taking care of. And the people that are in charge in our society of that kind of invention, we call entrepreneurs.

That’s what Henry Ford did years ago to help put to work many of the people who had previously been working on farms. Steve Jobs, Bill Gates, others helped create entirely new industries that weren’t—couldn’t have been—conceived of previously. We’re actually not doing a very good job of that right now in terms of invention and creation of new industries. There’s less of it going on in the past decade than there was in previous decades. I think we can do a better job, and that will help with the creative destruction that will boost more incomes and create shared prosperity. I also think there are things we can do with the tax code; there are things we can do to boost growth. They’re described in more detail in the book, but broadly speaking I’m optimistic that there’s a set of policies we can implement that will make a big difference.

Stephen Cass: Beyond the realm of government and corporate policy, what can individuals do to prepare for a future living in this new machine age?

Erik Brynjolfsson: Well, I have three pieces of advice to individuals and to people who have kids, and the first is to look for things that you can do well, that humans can do well, that machines can’t do well, and those are things that often involve creativity, they often involve interpersonal interactions, motivating people, nurturing people, caring for people. There’s going to be growing demand for those kinds of jobs going forward.

The second piece of advice is to keep learning and be ready to be flexible and adjust. The tasks that machines can do are constantly changing. Never say never to any given capability. We’ve seen a lot of changes just in the past five or 10 years, and we’ll see even bigger ones in the next decade, so we all have to be prepared to constantly learn. It’s not something you do once when you’re young and then you’re done.

And the third piece of advice is to really follow your passion. Now, that’s always been good advice, but it’s especially important in the second machine age because we’re seeing more and more winner-take-all markets, where if you have a good idea, a good insight, you can digitize it and replicate it and reach millions and billions of people and really dominate a market. We’ve seen people do really well. But it also means that people who are just average or above average have a hard time competing with superstars in any area.

I think there are a lot of niches and things that people can do, where they can be among the world’s best, and you need to think about what sorts of things you’re passionate about and pursue those, and that gives you the chance to be somebody who can reach a big audience and do very well in the second machine age.

Stephen Cass: Well, that’s certainly something to bear in mind. Thank you so much for speaking with us today.

Erik Brynjolfsson: It’s been a real pleasure.

This interview was recorded Tuesday, 4 March 2014.

Audio engineer: Francesco Ferorelli

Segment producer: Barbara Finkelstein

Photo: iStockphoto

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A correction to this transcript was made on 27 March 2014.