Book summary: The Second Machine Age

Brynjolfsson, E. and McAfee, A. (2014). The Second Machine Age. New York: W.W. Norton & Co. ISBN 978-0-393-23935-5.

The human history of progress has seen astonishing development since the beginning of the industrial revolution, powered by technological innovation that boosted physical power, and is expected to continue with the current digital revolution by boosting mental power. We’re at the Inflection point where the distinction of human advantages of doing cognitively creative and seemingly small unpredicted activities over machines is expected to disappear soon. The constant doubling of computing power in nearly every two years, as predicted in Moore's law, is making the science fictions a reality. The fuel behind the digital revolution, the Information and Communication Technology (ICT) is a General Purpose Technology (GPT) that excels through recombining ideas which doesn't get used up through usage. More and more of our everyday stuffs, such as, books, maps, human interactions, etc. are going digital and is creating an enormous opportunity that defies the traditional economics of scarcity and creates the digital economy of abundance.

Artificial Intelligence has matured to the point where we now have “machine” that can think - the very notion that was solely attributed to a human being. The billions of connected people in the world with access to the world's stock of knowledge, is creating the opportunity of infinite computing thus enabling endless innovation. Just like the first machine age did with the power of steam and internal combustion engines, and electricity, this second machine age with digital power has increased the productivity in manifold. But this is not reflected on GDP as most of the assets created are intangible in nature or virtually free. The second machine age, armed with digital technology, has created the Winner-Take-All economy where it is now possible for a very small number superstar people to acquire a vast amount of wealth due to the accessibility and economy of scale and making the age old social problem of growing inequality to its worse state.

The bounty of the second machine age is causing the spread to increase and ultimately putting the progress of the prior machine age at risk. Though there's debate among the economists whether technology brings the employment down or not, but the recent data shows that the digital technology has proved to increase the productivity independent of the need of job growth. To overcome that challenge, we have to reinforce the skills, such as, Ideation, large-frame pattern recognition, etc. at the individual levels, as well as revisiting some of the policies that will strengthen the society, such as, teaching our kids, supporting our scientist and teachers, upgrading the ailing infrastructures, restructuring taxation and, potentially, enacting the basic income guarantee. In the long-term, creating jobs for human should the center of gravity to avoid the unwanted consequences of joblessness. The future is fuzzy and often looking grim, but if we are mindful about what we value for our society and as individual, we can shape our destiny.