Rapid technology change set to bring benefits and dislocations
There will be an ever greater digital bounty, but robots may well replace workers and the gap between rich and poor will widen
Most people may only be dimly aware of it, but fundamental changes are being wrought by massively networked computers and robotics, and they are transforming society.
Some of us may still think technological innovation has plateaued and that we cannot expect new innovation to provide the kind of growth that technologies such as electricity did in the 20th century.
We may be in for a big surprise. In a new book, The Second Machine Age, authors Eric BrynJolfsson and Andrew McAffee, both directors of the MIT Centre for Digital Business, argue we are on the brink of a new wave of innovation.
Advances in computing power, network speeds and robotics are converging to make things possible which were unimaginable a few years ago.
Some of these new inventions are around us already or just around the corner. Just think driverless cars, or robots and computers which can win quiz shows and chess games against the greatest grand masters.
If the authors are right, the impact on society will be great as innovation makes and breaks jobs - mostly breaks jobs. The internet age is a winner-takes-all age; there is no room for runners-up. For example, we once used thousands of libraries but now we have just Amazon and Google books. Second-rank businesses tend to languish - think of Bing or Barnes and Noble. In compensation though there is a long tail, which allows businesses with small niches to survive, so experts in glazing armadillo shells or teaching Yamamami can now scrape a living.
One way we fail to understand the impact of technology is the way we are obsessed with GDP, which fails to measure social media wealth creation. At least in the developed world, much of current economic activity is digital and free. An increasing proportion of work which creates value is not measured by traditional statistics or company balance sheets.
But while the masses may enjoy free usage, the book points out that this has paradoxically caused the redistribution of wealth from the majority to the minority. There is also statistical evidence to show that incomes are falling and social mobility is declining for the majority, while housing and education costs rise, especially in the US.
We may be heading towards a world of ever greater digital bounty, meaning ever cheaper and more awesome digital services such as maps, medical and health services, music, video, e-books and other information. But the downside of this free lunch is that non-digital assets will continue to rise in price, absorbing the wealth "liberated" by innovation.
What does this mean for the rest of us? Well, if you are in the top 80 per cent, congratulations, just keep going and things will keep getting better. The further up you are, the more you will prosper relative to those below.
If you are in the bottom four-fifths, then be prepared for the threat of automation, especially if you are a "knowledge worker". It is much easier to replace an engineer, doctor or stock analyst with a computer than to make a robot which can weed a garden or cut hair.
In sum, avoid jobs which can be automated, buy a home while you can still afford it and grab as many digital freebies as you can along the way. And consider supporting Occupy Central, because well-functioning democracies have a better record of redistributing wealth than authoritarian oligarchies.
Stephen Thompson is a Hong Kong-based journalist and IT consultant