Race Against The Machine
* Book: Race Against The Machine. By Erik Brynjolfsson and Andrew MacAfee.
Summary
John Hagel:
"The authors, Erik Brynjolfsson and Andrew MacAfee, take a current news topic that has engaged the hearts and minds of many – persistent unemployment in the US – and suggest that this is a structural issue, not simply a temporary, cyclical event that will quickly improve. They argue that this issue is unlikely to go away in the foreseeable future and may actually become much more severe before it becomes better.
The economic impact of technological progress
Their goal is simple, as the authors state in a sub-heading of their first chapter - “Our Goal: Bringing Technology into the Discussion.” Appropriately, they start by tracking the rapid advance of digital technology that is increasingly able to take on tasks that we would never have expected possible a few short decades ago.
They then proceed to examine the creative destruction that is driving growing mismatch between economic winners and losers. The authors in particular explore the paradox that advances in terms of economic productivity can at the same time leave a growing number of people behind. As they observe, “there is no economic law that says that everyone, or even most people, automatically benefit from technological progress.” In particular, they highlight three divergences that are increasingly shaping the US economic landscape: “between higher-skilled and lower-skilled workers, between superstars and everyone else, and between capital and labor.” They say the problem is even more stark because “. . . the winners in one set are more likely to be winners in the other two sets as well, which concentrates the consequences.” This is the richest part of the book and there is much to be learned about the economic impact that technology has had on our workforce.
What is to be done?
Race Against the Machine purports to be an optimistic book, but the description of the challenge is far more detailed and compelling than the brief chapter that addresses “What Is To Be Done?” As a framework for resolution of the growing challenge of digital automation, the authors propose that “. . . the key to winning the race is not to compete against machines, but to compete with machines” and ". . .we can learn to better race with machines, using them as allies rather than adversaries.” (http://edgeperspectives.typepad.com/edge_perspectives/2012/08/from-race-against-the-machine-to-race-with-the-machine.html)
Review
John Hagel:
"Until and unless we get to the root cause of the problem, we’ll never solve the problem. The authors frame the issue as a technological issue, but it’s really an institutional issue. Until we can develop an alternative institutional model, one that can scale as effectively as the scalable efficiency model, we will face mounting pressure from machines and remain locked in a race against the machine without the ability to finally race with the machine.
But here’s the good news. The scalable efficiency institutional model is fundamentally and irreversibly broken as I’ve argued at great length in The Power of Pull, with my co-authors, John Seely Brown and Lang Davison.
Why is it broken? Because digital technology has re-shaped our global business landscape in profound ways. It makes forecasts and predictions more and more challenging as we see more and more volatility and the increasing frequency of extreme, unanticipated events (“black swans”). We increasingly find ourselves in a Paretian world but predictability can only be found in a Gaussian world where averages are meaningful. The push programs that seemed so essential to scalable efficiency now produce the opposite: increasing inefficiency, as rigidly constructed programs face unanticipated changes in the market.
Equally importantly, we’re moving from a world of knowledge stocks, where competitive advantage resides in proprietary knowledge of lasting value, to a world of knowledge flows, where competitive advantage can only be attained by participating effectively in a larger and more diverse set of knowledge flows. In a world that’s changing more rapidly with growing uncertainty, knowledge stocks depreciate in value at an accelerating rate.
This suggests an alternative rationale for institutions. Rather than pursuing scalable efficiency, perhaps we need a new set of institutions that can drive scalable learning, helping participants to learn faster by working together. While simple to state and intuitively appealing, this requires profound changes to our institutional landscape.
Rather than relying on rigid push programs, we need to increasingly develop scalable pull platforms where people can draw out people and resources where they are needed and when they are needed, not just to perform pre-defined tasks, but to engage in creative problem-solving as unanticipated challenges arise. Interestingly, the authors of Race Against the Machine, cite a number of promising entrepreneurial initiatives that all turn out to be examples of scalable pull platforms, but they don’t step back to really develop what is different about these pull platforms or to explore their potential for accelerated learning and performance improvement.
These pull platforms have an interesting property. They not only accommodate, but demand, the attributes of participants that are least susceptible to automation – imagination, creativity, genuine insight and emotional and moral intelligence. In fact, these pull platforms catalyze, cultivate and reward these attributes – the same attributes that are so suspect in today’s push driven institutions. In pull-driven institutions, participants are no longer fungible cost items but instead become fully visible as assets with the potential for virtually unlimited development.
One more point. These pull platforms are much more challenging to scale without digital technology infrastructure. At long last, we will have an institutional framework that requires us to race with the machine, rather than simply racing against the machine.
This emergence of pull-based institutions isn’t simply confined to the domain of corporations. It will pervade all institutional domains. For example, our educational system is a classic push driven environment – not surprising, given that its primary mission was to prepare individuals to enter the workforce of push driven corporations. Adopting this institutional re-framing in education points out the limitations of the authors’ recommendations on education – simply investing more money and working longer hours in a push driven educational environment will have only marginal impact at best." (http://edgeperspectives.typepad.com/edge_perspectives/2012/08/from-race-against-the-machine-to-race-with-the-machine.html)