Erik Brynjolfsson and Andrew McAfee have created a powerful, concise and informative discussion of the impact of technology on employment, income distribution and macroeconomics. Do not be fooled by the title, Race Against the Machine is not a neo luddite treatise on the evils of automation and technology. The title is more about generating buzz and attention than an accurate label for what is in this book — nothing short of the best explanation of the economy we face in the future and the role of technology.
This book is highly recommended to anyone who wants to understand why we can have a recession, a jobless recovery and growing income distribution inequities all at the same time. This book does a tremendous job steering its explanation based on facts, insights from other economists and thought leaders.
Brynjolfsson and McAfee’s basic argument is that we are just beginning to see the long-term impact of technology on the economy. The authors highlight this using the analogy of Chinese story where the emperor agrees to pay a servant a grain of rice and then doubling that amount for each square on the chessboard. That doubling is the foundation of technology’s driving forces embodied in the laws of Moore, Metcalfe and others.
The authors believe that we are just getting to the back half of the chessboard where a doubling of technology creates gigantic leaps in capability at an unprecedented pace. These leaps are beginning to displace human work as technologies like IBM’s Watson and others demonstrate the ability to handle complex work.
The book is divided into five chapters:
Chapter 1. Technology’s influence on the employment and the economy. The first chapter provides an overview of the book and its chapters. Here the authors do a good job supporting their argument based on the observation and ideas of others. The chapter could have been a dry recitation of prior research, but Brynjolfsson and McAfee have described the issue in ways that are broadly accessible.
Chapter 2. Humanity and technology on the second half of the chessboard — discusses the impact of technology on the economy, productivity and employment. This chapter focuses on things that are emerging as the capability of technology has crossed a threshold. The most interesting part of this discussion concentrated on General Purpose Technology (GPT) and how these technologies drive further investment in technology.
Chapter 3. Creative destruction: the economic of accelerating technology and disappearing jobs. This chapter is the most informative as it explains the impact of technology on employment and income. Here the discussion of highly-skilled vs. skilled workers, Superstars vs. Everyone else, and Capital vs. Labor all explain different aspects of the economy we all live in.
Chapter 4: What is to be done? Prescriptions and Recommendations — contains a list of 13 recommendations for fostering organizational innovation and investing in human capital. These are two areas where investments can lead to creating new employment opportunities and growth. I will not go over the recommendations, many are ones that you may have heard of in the past, but the authors put these recommendations into a new context.
5. Conclusion: the Digital Frontier — provides a discussion of the new economy emerging and the impact of digitalization in terms of creating new sources of value and disruption. It is an apt conclusion to the book.
Each chapter focuses on a different aspect technology, the economy, employment etc. in a concise and informative way. The authors take full advantage of the book’s electronic form by providing active links to referenced research and opinion. While not accessible when you are disconnected, the ability to quickly jump into some original source material adds to the value of the book.
The book can be easily read in under 4 hours and would be the best use of your time on a long plane ride where you can read and think through the author’s ideas and their implications.
Brynjolfsson and McAfee have created a readily accessible, influential and provocative book that should be read by business executives, policy makers and technologist to give them a better understanding of the deep forces at work in the global economy. Some will disagree with the author’s recommendations, particularly given that it would be easy to associate some of their recommendations and moderately to the right. That would be a mistake, as I believe Brynjolfsson and McAfee have been able to take a relatively neutral view of an economist to these issues.
At $3.99 on Amazon, this book is more than well worth the cost and most importantly your time and attention.
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