Part One: Short Summary
The Second Machine Age is a novel that argues that the human race is at an “inflection point” in the realm of Human Social development, meaning that we are currently in a point in our history where the power of technology is skyrocketing and leaving an ever increasing meaningful impact on our lives. In the first Machine Age, computers and technology gained were designed for physical power and greatly surpassed man in terms of physical work ability, most notably the steam engine. Now, Erik Brynjolfsson and Andrew McAfee argue that in the “Second Machine Age” computers and technology are surpassing human ability in mental power. Technology increased its mental computing power with the improvements to processors and now is able to shatter our previous limitations just like the first Machine Age did in the 1800s. This “Second Machine Age” comes with three broad predictions that the authors made: (1) we are living in a time of astonishing progress with digital technologies (those that have computer hardware, software, and networks at their core), (2) transformations brought about by this Second Machine Age will be profoundly beneficial, and (3) that the digitization that will come with this age will bring with it some thorny challenges.
The book is neatly divided into three parts. The first part describes the fundamental characteristics of the Second Machine Age. In this section, the authors argued that computers are to be treated like a new division of labor, which are incredibly proficient at following rules but poor in pattern recognition. The authors also bring up Moore’s Law, which states that technology’s computing power doubles every 2 years, has now increased to 1.5 years instead of 2 years. This means that computing power is growing at a rate that is exponentially increasing. Another massive component of this new age is that everything is now digitalized and these gadgets are spreading through word of mouth the same way local restaurants, movies, or anything else did before them.
The second part explores bounty and spread- the two economic consequences of this progress. Bounty is that the average GDP/person has doubled since the 1800s- meaning that average person is twice rich as they would be in 1800 on average. Outside of GDP, intangible assets and wellness of life have grown exponentially, calling for the need of new metrics to measure wealth. Spread details the gap between the wealthiest and the poorest members of a society. The authors point out the spread as ever increased in the Second Machine Age, just as they did in the first one. It is now better than ever to be a specialized, knowledgeable worker but the worst time ever to only have basic skills that a computer could replicate. However, the book argues that people are now getting a smaller slice of a large pie on average compared to the rest of human history.
The final portion of this book details what interventions will be appropriate and effective for this age. The authors of this book suggest that we should teach our children well so GDP will rise greatly, restart startups because it is the best way to create jobs and opportunity, reduce search costs for people to find jobs, fund government scientists to research innovative strategies, upgrade the countries infrastructure to decrease costs and improve quality of life, and tax wisely to not slow production.
Part Two: In-depth Treatment of Ideation
The authors argued that where humans currently have the upper hand over computers is ideation- strategic developments and guidance. Computers current can create rhyming lines of text, but they cannot create a poem that thinks of a topic and writes in an eloquent and stylistic manner. This is the equivalent to how it a million years could pass and a room full of monkeys and typewriters would never reproduce Shakespeare.
This means that humans currently have the upper hand when it comes to being entrepreneurial and analyzing trends. Putting a great plan together and being wise will never go out of style, no matter how creative or powerful technology will become. This is shown in our course- no matter how strong processors will become; we will never have computers on autopilot managing companies like they current do with cars. Strategic management is what set apart the companies that we will learn about and visit in this course, and is a skill that we should hone on.
Part Three: Overall Assessment
Overall, I thought The Second Machine Age was a fantastic read that was thought provoking and thoroughly made a convincing argument for the modern age to be a “Second Machine Age”. It made points about our currents rates of progress and technology that were new to me and left me thinking about their implications for nights to come. Ultimately, I greatly enjoyed this novel and would recommend it to anybody who is interested in entrepreneurship or technology in the modern world.