Saturday, September 07, 2013

Who will prosper in the age of smart machines?

What if Siri really worked? ...worked so well that those that mastered co-operation with a digital assistant had a serious competitive advantage over those relying on their own cognitive powers alone?

That question is considered by economist Tyler Cowen in a new book called Average is Over. Previously, Cowen wrote The Great Stagnation and maintains the Marginal Revolution blog and teaches online classes at Marginal Revolution University.

"Increasingly, machines are providing not only the brawn but the brains, too, and that raises the question of where humans fit into this picture — who will prosper and who won’t in this new kind of machine economy?"

Tyler Cowen's answers

Who will gain: People who can collaborate with smart machines; life long learners; people with marketing skills; motivators.

"Sheer technical skill can be done by the machines, but integrating the tech side with an attention-grabbing innovation is a lot harder."

The psychological aspect is interesting. The traditional techy nerd (ahem... hello, self) has a psychology adapted to machines. But, machines are gaining the capacity to interface on a level adapted human psychology.

Who will lose: People who compete with smart machines; people who are squeamish about being tracked, evaluated and rated; the sick; bohemians; political radicals.

On being quantified

"Computing and software will make it easier to measure performance and productivity. [...] In essence everyone will suffer the fate of professional chess players, who always know when they have lost a game, have an exact numerical rating for their overall performance, and find excuses for failure hard to come by."

On hipsters

"These urban areas [he doesn't mention Portland by name] are full of people who are bright, culturally literate, Internet-savvy and far from committed to the idea of hard work directed toward earning a good middle-class living. We’ll need a new name for the group of people who have the incomes of the lower middle class and the cultural habits of the wealthy or upper middle class. They will spread a libertarian worldview that working for other people full time is an abominable way to get by."

How many will prosper

The current trend of unequal wealth distribution will only continue as technological literacy takes on new dimensions. "Big data" makes it easier to measure and grade our skills and failings. Apex skills are the ability to grab human attention, to motivate, to manage humans and machines in collaboration.

Another, not quite contrasting view comes from Northwestern University economist Robert Gordon. His paper "Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds", suggests that "the rapid progress made over the past 250 years could well turn out to be a unique episode in human history." In particular, he raises the possibility that the internet and digital and mobile technology may contribute less to productivity than previous industrial revolutions.

Technology can create winner-take-all situations, where a few capture enormous gains leaving the also-rans with little. A lot depends on the distribution of technology's benefits.

More