Racing with the Machine – Productivity & Growth

At the 2013 TED conference there was a debate between Prof Robert Gordon and Erik Brynjolfsson (director of the MIT Center for Digital Business) on the future of work.

I have written before about Gordons theory  but here is a great way to work through some counter arguments. Erik makes a number of great points like:

“[Current economic] troubles are sometimes misdiagnosed as the end of innovation, but they are actually the growing pains of … the new machine age.”

“We have created more wealth in the past decade than ever, but for a majority of Americans, their income has fallen. This is the great decoupling of productivity from employment, of wealth from work.”

I suggest that you watch this clip and the Gordon clip before you watch the debate as it refers back to both of these talks. I will post the other 2 clips in the next 2 days or so.

The future of work is a huge topic and it won’t go away. I like that Erik has estimated the “free good & services on the internet at $300b. ( I suspect the number and the impact is much greater but hard to measure in GDP terms see Hazel Henderson on this)

“If anything, all these numbers actually understate our progress, because the new machine age is more about knowledge creation than just physical production. It’s mind not matter, brain not brawn, ideas not things. That creates a problem for standard metrics, because we’re getting more and more stuff for free, like Wikipedia, Google, Skype, and if they post it on the web, even this TED Talk. Now getting stuff for free is a good thing, right? Sure, of course it is.

But that’s not how economists measure GDP. Zero price means zero weight in the GDP statistics.

According to the numbers, the music industry is half the size that it was 10 years ago, but I’m listening to more and better music than ever. You know, I bet you are too. In total, my research estimates that the GDP numbers miss over 300 billion dollars per year in free goods and services on the Internet.”

Growth comes from a combination of these factors – digital, exponential growth and combinatorial thinking.

erik2

The other part of this clip that I like is this reference.

“The new machine age can be dated to a day 15 years ago when Gary Kasparov, the world chess champion, played Deep Blue, a supercomputer. The machine won that day, and today, a chess program running on a cell phone can beat a human grandmaster. It got so bad that, when he was asked what strategy he would use against a computer, Jan Donner, the Dutch grandmaster, replied, “I’d bring a hammer.”

(Laughter)

“But today a computer is no longer the world chess champion. Neither is a human, because Kasparov organized a freestyle tournament where teams of humans and computers could work together, and the winning team had no grandmaster, and it had no supercomputer. What they had was better teamwork, and they showed that a team of humans and computers, working together, could beat any computer or any human working alone. Racing with the machine beats racing against the machine. Technology is not destiny. We shape our destiny.”

This is the third reference to that freestyle tournament I have come across in the last few months.

Sean Gourley referred to the freestyle story in his TEDxAuckland talk last year and Nate Silver wrote about it in his book “The Signal and the Noise: Why So Many Predictions Fail-but Some Don’t”

In my view that freestyle chess story is becoming something of a mythological creation story for the new world as it was also referred to in a talk by Shyam Sankar, that I have mentioned here before as well.

Serendipity Footnote: It is often said that we are divided by 6 degrees of separation but in New Zealand it is only 2 degrees and we even have a telco company named after that. Here is a pic* of Sean Gourley and Nate Silver together at TED 2013 possibly even taken on the same day as Eriks talk above. This talk reminded me very much of the one that Sean had already given –The Rise of Big Data and Augmented intelligence  in a bit of a snap moment although Brynjolfsson is approaching the story from more of an economics angle. *Pic is from instagram.

Sean Gourley / Nate Silver