Andrew McAfee

“It's way too early to say that there won't be any more work for people to do in five or ten years”

The MIT scientist, co-author of the bestselling book on The Second Machine Age, discusses the impact of digital technologies on work, the economy and society, and how human beings should adapt as the pace of change accelerates.

What led you to set up the Initiative on the Digital Economy at MIT’s business school?

My colleague Erik Brynjolfsson and I co-founded the Initiative because we felt that there was a need to study how technological progress was radically changing the business world, changing economies, changing societies. It needed a dedicated academic home where we could do research, host conversations and bring people together – work aimed at helping businesses understand how to navigate this important transition and harness the power of technology.

What is the biggest challenge arising from the growth of the digital economy?

It’s pretty clear that in most countries in the rich world, the middle class is under some pressure. In countries like the US and Switzerland, a large, stable, prosperous middle class was built from people doing routine jobs – both difficult jobs and cognitive jobs. But those jobs have gone because globalisation has moved some of them elsewhere and technological progress has displaced humans from others. The challenge is how do we maintain a healthy, stable, prosperous middle class when we move beyond a world that needs a lot of routine labour?

What types of companies do you work with to help them in this transformation?

We work with all kinds of companies, especially those that are facing up to these challenges in interesting ways. People who are leading successful incumbent organisations in many different industries around the world accept that the world is changing very quickly, and that technology is doing things it could never do before. But they want to know what that means for their business models and the way they go to market, so that they can take advantage of what’s going on.

How should companies respond to digital technologies?

There is a wide range of responses. Some are excited by the challenge, and some feel that they pose a threat. The most dangerous response is to dismiss or minimise the changes that are going on, or to believe that they just need to make a couple of small adjustments. Machines are demonstrating their ability to beat human beings at their own game: they can understand our speech, figure out what we want, drive vehicles and fly aircraft – things previously done only in science fiction. Companies need to work out how they can combine what people are best at with what machines are best at so that they can achieve excellent results.

What developments do you see happening next?

If anyone had asked us ten years ago to guess what would happen over the next ten years, we would have been deeply wrong. But artificial intelligence and machine learning are advancing incredibly quickly and machines will acquire capabilities that will astonish us, in activities such as medical diagnosis, financial advice, transport, devising successful strategies and formulating scientific hypotheses. One other fast-growing development is in digital platforms which bring together large numbers of people to execute transactions with very good results. Companies will have to build successful platform business models and scale them up very quickly to avoid disruption of their businesses.


Are creative industries less susceptible to disruption, as many people believe?

Well, we’ve already seen serious disruption in some creative industries such as recorded music, which is about half the size it was globally 20 years ago. I believe we human beings are still the absolute champions at creativity, so I don’t think that all creative professionals are going to be unemployed because of technology. But their work will change a lot, and one interesting shift is that we might use computers and software to come up with the first versions of creative work, before using human ingenuity and ability to refine and improve it. Creative professionals spend a lot of time coming up with the first ideas, which maybe could be done by machines.

Will most of the technological advances continue to come from the US?

Most of the great technology companies are in the US, but technological talent is not concentrated here, especially with all the resources available online. We now have the ability to tap into the collective expertise of hundreds of millions, or even billions, of people around the world. So far, it is mainly US companies that have harnessed the global talent, but brilliant and really creative people all around the world have much greater opportunity to express themselves and achieve something remarkable. Even as machines are racing ahead, humanity is also racing ahead as the world’s population becomes interconnected for the very first time.

Can our political systems deal with the pace of technological change?

Technology is changing more quickly than business strategies and business models, our understanding and mindsets, and our political institutions. But the answer is not to try to slow it down, which would be a terrible idea – we need to make adjustments, some of them large, very quickly. The problem in some countries, including the US, is that political systems are becoming more polarised, and we are losing our ability to make big changes at exactly the time when we need to do so. Andrew McAfee is a principal research scientist at the Massachusetts Institute of Technology Sloan School of Management. With Erik Brynjolfsson, he co-founded the Institute’s Initiative on the Digital Economy to study how digital technologies are changing business, the economy and society. He wrote Enterprise 2.0 which was published in 2009, and co-wrote with Brynjolfsson Race Against the Machine which was expanded in 2014 into The Second Machine Age. The latter was a New York Times bestseller, and was shortlisted for the Financial Times/McKinsey Business Book of the Year award.

What are all the people whose jobs are taken over by technology going to do?

The only way to answer that question is to let the engine of economic progress do its work, as it did over the 200 years since the Industrial Revolution when it found a great need for human beings and the work they can do. Thinking about where the jobs will come from can’t be done by smart people in Washington, DC or Cambridge, Massachusetts. That’s what entrepreneurs and innovators do, so we must let them get on with their work and see what they can accomplish. And if we don’t like some of the results, we can use policy or taxation to try to reverse situations. It’s way too early to say that there won’t be any more work for people to do in five or ten years. We are still generating jobs: in the US, for example, the number of jobs has been going up month by month for more than five years. The problem is that the jobs are different from those which were needed a generation or two ago, and education must change to recognise that. It feels to me that we’re still educating people for the kind of jobs we had 50 years ago, and that’s a bad idea.

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