Power-Curve Society

* Report: Power-Curve Society: The Future of Innovation, Opportunity and Social Equity in the Emerging Networked Economy. By David Bollier. Aspen Institute (Communications and Society Program), 2013

URL = http://as.pn/powercurve

Description

The Aspen Institute Communications and Society Program today released a report that offers a sweeping look at how technological innovation is restructuring productivity and lays out the social and economic impact resulting from these changes.

Power-Curve Society: The Future of Innovation, Opportunity and Social Equity in the Emerging Networked Economy, written by David Bollier, addresses the growing concern about the technological displacement of jobs, stagnant middle class income, and wealth disparities in an emerging €œwinner-take-all economy. It also examines cutting-edge innovations in personal data ecosystems which could potentially unlock a revolutionary wave of individual economic empowerment.

The report derives from the Aspen Institute Communications and Society Program'€™s 21st annual Roundtable on Information Technology, held in Aspen last August. It includes insights from MIT Media Lab Director Joi Ito, Federal Communications Commission Chairman Julius Genachowski, Ciscoâ€'s Padmasree Warrior, MIT Economists Andrew McAfee and Erik Brynjolfsson, Reputation.com CEO Michael Fertik, and Khan Academy President and CEO Shantanu Sinha, among many others.

â€Power-Curve Society€ considers the broad implications of a globally networked economy that allows greater ease of transactions but relies less on human workers to carry them out. In this emerging technologically accelerated economy, wealth increasingly concentrates in the hands of a few rather than spreading itself out across the larger population (i.e., the traditional €œbell curveâ of normal distributions). The Report explores the mechanisms of this phenomenon and its suspected role in €œhollowing out€ the American middle class. It also questions contemporary measurements of equality, well-being and value in the digital age; and it surveys the ways that cloud computing, Big Data and collaboration are redefining work and commerce.

Along with examining the historical relationship between innovation and productivity, Power-Curve Society€ assesses the increasing speed by which new technologies are outpacing social and institutional capabilities. It then presents groundbreaking new frameworks for rethinking entrenched notions of jobs, learning, skills, entrepreneurship and public policy to better brace everyone, rich and poor, for the unrelenting future.

€œThis report lays out some of the gravest issues that face us,€ said Charlie Firestone, Executive Director of the Communications and Society Program, “and the solutions and insights gathered by David Bollier come from some of the brightest minds leading the charge.

âPower-Curve Society: The Future of Innovation, Opportunity and Social Equity in the Emerging Networked Economy” is the result of a three-day Aspen Institute dialogue that convened venture capitalists, economists, management gurus, technologists, and innovators in business, education, philanthropy and government to address the topic. A complete list of participants is in the Report." (http://www.aspeninstitute.org/policy-work/communications-society/power-curve-society-future-innovation-opportunity-social-equity)

TABLE OF CONTENTS

Foreword, Charles M. Firestone

Introduction

The Innovation Economy

The New Economy of Personal Information

The Power-Curve Phenomenon and its Social Implications

Jobs in the Power-Curve Nation

The Social Implications of the Power-Curve Economy

Government Policies and Leadership Responsibilities

Conclusion

Roundtable Participants

About the Author

About the Aspen Institute Communications and Society Program

Excerpts

Introduction

David Bollier:

"It is now nearly twenty years since the World Wide Web exploded, helping to insinuate the Internet and countless digital technologies into all aspects of the economy and everyday life. Yet even as businesses struggle to come to terms with this revolution, a new set of structural innovations is washing over businesses, organizations and government, forcing near-constant adaptation and change. It is no exaggeration to say that the explosion of innovative technologies and their dense interconnections is inventing a new kind of economy.

Although the new technologies are clearly driving economic growth and higher productivity, the distribution of these benefits is skewed in worrisome ways. Wealth and income distribution no longer resemble a familiar “bell curve” in which the bulk of the wealth accrue to a large middle class. Instead, the networked economy seems to be producing a “power-curve” distribution, sometimes known as a “winner-take-all” economy. A relative few players tend to excel and reap disproportionate benefits while the great mass of the population scrambles for lower-paid, lower-skilled jobs, if they can be found at all. Economic and social insecurity is widespread.

This report provides a sketch of the emerging “power-curve economy” and its far-reaching economic and social implications. We start by giving an overview of contemporary trends in technological innovation and their economic implications. We then continue with an assessment of a major component of this new economy, Big Data, and the coming personal data revolution fomenting beneath it that seeks to put individuals, and not companies or governments, at the forefront. Companies in the power-curve economy rely heavily on big databases of personal information to improve their marketing, product design, and corporate strategies. The unanswered question is whether the multiplying reservoirs of personal data will be used to benefit individuals as consumers and citizens, or whether large Internet companies will control and monetize Big Data for their private gain.

Why are winner-take-all dynamics so powerful? We next examine why networks often produce power-curve distributions, and how these dynamics appear to be eroding the economic security of the middle class. Is this an inexorable structural trend, and if so, how might its impacts be mitigated? A special concern is whether information and communications technologies are actually eliminating more jobs than they are creating—and in what countries and occupations.

Finally, this report looks at the broader social implications of the emerging economy. How is the power-curve economy opening up opportunities or shutting them down? Is it polarizing income and wealth distributions? How is it changing the nature of work and traditional organizations and altering family and personal life? Although there are obvious benefits from the wealth creation that stem from innovation and growth, many observers fear a wave of social and political disruption if a society’s basic commitments to fairness, individual opportunity and democratic values cannot be honored. An important question, therefore, is what role government should play in balancing these sometimes-conflicting priorities. How might educational policies, research and development, and immigration policies need to be altered?

To address this complex mix of issues, the Aspen Institute Communications and Society program convened a diverse group of twenty-eight experts from the worlds of information technology, venture capital, economics, government policymaking, philanthropy, academia and management consulting, for three days of discussion, from August 1-3, 2012, in Aspen, Colorado. Charles M. Firestone, Executive Director of the Aspen Institute Communications and Society Program, moderated. This report is an interpretive synthesis of the highlights of those talks." (http://www.aspeninstitute.org/policy-work/communications-society/power-curve-society-future-innovation-opportunity-social-equity?)

Conclusion

"The challenges of the power-curve economy are formidable indeed. In the more optimistic scenario, the coming surges of productivity, innovation and economic growth will be disruptive, but tolerable and hopeful because they will also usher in enormous efficiencies and bounties that could eradicate poverty and improve standards of living. Under this scenario, the transition we are in must be understood as something on the scale of the Industrial Revolution itself.

In a more troubling scenario, the power-curve economy poses a series of disruptions that have no easy or recognized solutions. We appear headed for a greater polarization into haves and have-nots and more acute economic hardship and unemployment. Greater social and political unrest seem inevitable if no interventions are taken to deal with the current arc of economic activity.

Clearly the discussion about how to anticipate and address the dynamics of the power-curve economy is still in its very early stages. It will take more study to reach a deeper understanding of the socio-economic and technological dynamics at play. We will need more time to see how technological innovation and network effects play out in specific industry sectors, and what general conclusions might be drawn from such developments.

The worlds of politics and public policy may have the steepest learning curve to navigate, however, because so many of its guiding narratives are based on twentieth-century economics and governance models. Much more serious attention must therefore be paid to the “edge” of contemporary technology, networks, markets and culture, where the harbingers of the future first manifest themselves before moving to the center. But even this task requires escaping the gravitational pull of established institutions and treating emergent phenomena with greater seriousness.

This report is an early attempt to do just that. But we if are to truly understand the emerging power-curve economy and its social ramifications, and if we wish to maintain a sustainable balance between innovation, opportunity and social equity, we must probe more deeply into the challenges explored in the preceding pages. It seems likely that we need to devise entirely new sorts of policy approaches and institutional systems to deal with the novel, global dynamics of the power-curve economy." (http://www.aspeninstitute.org/policy-work/communications-society/power-curve-society-future-innovation-opportunity-social-equity?)

More Information

Read it at http://as.pn/powercurve. On Twitter: use #powercurve and follow @aspencs.