Tag: Andrew Mcafee

The second half of the chessboard

There’s a great metaphor in Erik Brynjolfsson and Andrew McAfee’s Race Against the Machine which they in turn take from Ray Kurzweil:

In one version of the story, the inventor of the game of chess shows his creation to his country’s ruler. The emperor is so delighted by the game that he allows the inventor to name his own reward. The clever man asks for a quantity of rice to be determined as follows: one grain of rice is placed on the first square of the chessboard, two grains on the second, four on the third, and so on, with each square receiving twice as many grains as the previous. The emperor agrees, thinking that this reward was too small. He eventually sees, however, that the constant doubling results in tremendously large numbers. The inventor winds up with 2 to the power of 63 grains of rice, or a pile bigger than Mount Everest. In some versions of the story the emperor is so displeased at being outsmarted that he beheads the inventor.

Their point is that in an era of exponential increase in the power of technology, things get only get really interesting in the second half of the chessboard. I don’t think anyone can predict what this means but there are a few things that it seems to me are almost certain to be possible in the next five to ten years. Let’s go for a round number and say that by 2020…

  1. Automated translation will be almost perfect. If you’ve tried Google Translate you’ll know that it’s not bad already and the number of languages being added is pretty impressive. It won’t just be on text either. Text from image recognition and speech recognition are improving rapidly too. Just try Word Lens or Siri and imagine when they’re ten times better.
  2. It will be possible to track data about location, velocity and acceleration of any object in real time. My Fitbit Ultra is just the start of getting useful feedback — in that case on my own movement but I think the same will be true of vehicles and more. Phones or course can do this but at the moment it drains battery life and the software for doing anything useful with the information is a bit basic.
  3. Three dimensional printing of objects will be normal. The question will be one of price but with the printers themselves getting cheaper and the materials as well as companies start to compete to provide them in the right form, companies like Makerbot Industries and Shapeways are just the beginning.
  4. Humans will be routinely assisted in physical tasks requiring strength by machines. Even in the gap between James May filming this in 2008 in Japan and this filmed at CES this year, exoskeleton devices have come on a lot. I think they’ll develop further to help us in an ageing society.
  5. Road transport will be routinely automated. I think it will happen in trucks first because the driver is a significant cost for haulage companies because not only do they cost tens of thousands of pounds in wages and taxes, they can only work for 4.5 hours before they need a break (legally). The technology for cars is already pretty good — but expect a lot of resistance from the industry.
  6. Commercial space flight and delivery of objects into orbit will have begun. This is one of those areas where prizes has really helped but also one where the retreat of the state (NASA) has left a gap for different models to develop. What will the eventual craft look like? Maybe like this or this.
  7. Almost all financial transactions will be electronic. Square and NFC devices are examples of how much easier it’s getting to pay for things if you do things electronically. I’d definitely expect a possible all electronic tax system whereby if companies agree to only deal electronically and give tax authorities automatic access to their transaction logs they will be liable to a lower tax regime.
  8. Renewable energy will be cheaper than fossil fuels. Almost every week I hear of a new company with a different take on generating electricity whether it’s semiconductors that are thermoelectric or more efficient photovoltaics.
  9. Genetic and protein based diagnosis of medical conditions will be common. It took $3 billion and ten years to complete the first sequencing of the human genome. It costs a lot less than that now. companies like 23andme and scientists like Danny Hillis are pushing what’s possible both in terms of price and functionality further and faster.
  10. Stem cell therapies will be common. There’s a lot of work going on around the development of stem cell technologies for the treatment of deafness, heart disease, corneal injury and diabetes amongst other things. Whether these will have become available beyond trials I don’t know. But I think they’ll be possible.

Lots of other things will develop and I’m sure I’ve missed some obvious ones. How we’ll have adapted I have no idea — looking at the political world today I struggle to see how our institutions are equipped to adapt. But overall I’m optimistic about the technological tools we will have at our disposal. As always, whether they make the world a better place or not will be up to us.

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How to stop geeks becoming the next bankers

What if the jobs crisis we’re seeing across the western world isn’t just because of the financial meltdown, but is also due to technology? That’s the argument Andrew McAfee and Eric Brynjolfsson make in Race Against the Machine. They point out that the last decade was the first since the Great Depression with no net job creation in the US and are in no doubt about where they think the blame should be placed: “The median worker is losing the race against the machine”.

While technology has had massive benefits for our quality of life and overall prosperity, their argument about jobs is pretty compelling. We all know that the world of work has changed over the past two decades and that technology has become almost ubiquitous in developed economies, especially in workplaces. While creativity has become increasingly in demand and skilled manual jobs that machines can’t replace have remained solid, the information based jobs where somebody tells you what to do have gradually disappeared.

McAfee and Brynjolsson also show that while the number of jobs being created has slumped, the profits made by companies have continued to climb. The reason is that technology is creating productivity gains — leading to less money going to workers and more money to executives and investors who control the capital that invested in the technology in the first place. And we’re only just at the beginning of the trend. McAfee and Brynjofsson point to Google’s driverless cars as a sign of further jobs to be erased in the future by technology. How long will it be before the economics make sense for haulage companies to lay off truck drivers? And when will taxi drivers be a thing of the past?

The authors are actually big believers in technology and are pointing out the statistics as a way of getting a debate going before it’s too late. I think they’re right to do so. At some point people will start to look for the underlying cause. Technology could become a tainted industry in the same way that banking is the current pariah. McAfee and Brynjolfsson even raise the spectre of modern luddites — reprising the movement that broke the looms they thought were stealing their jobs in the 19th century. We can’t just say “That’s progress. Tough luck.” The world simply isn’t organised for a society of mass unemployment.

We need to act now and not just in a superficial way by giving more money to charities or pretending that startups all create jobs (as Stian Westlake points out, that’s just not true). Fundamentally we should stop working on the trivial and work on things that create real value. We should work in areas where technology is creating new industries and new jobs, not just sucking up peoples’ time into newer, shinier more pointless things. As a man much wiser than I put it, we should “Work on stuff that matters”.

We also need to look at the way the sector is financed because I’m seeing more an more evidence that it’s just not right. I know and respect some technology investors but there are others who I think are basically stealing money from peoples’ pension funds by creaming off a percentage from VC deals. Over the next five years finance and investment is going to be ripped apart particularly the cosy, secret deals done between founders, investors and acquirers. We should get real about pay and rewards for founders and early stage investors and become hyper transparent about them. Even Reid Hoffman, who I have a great deal of respect for, dodged the question about Airbnb founder dividends (which would effectively be coming from pension funds that are LPs in the funds making the investment) when I saw him speak last week. I think that makes people think the worst about a potentially great company.

Commentators are beginning to look around for people to blame for the current stagnation, and the stakes are too high for us to ignore the threat of technology becoming an industry that talented people want nothing to do with. We need technology to solve the difficult problems we face so it’s time to get the house in order. Technology should be creating new and better institutions rather than just gradually eroding old ones and leaving a vacuum in their place.
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