Race Against The Machine | Erik Brynjolfsson

Summary of: Race Against The Machine
By: Erik Brynjolfsson

Introduction

Welcome to the summary of ‘Race Against The Machine’ by Erik Brynjolfsson. This book delves into the profound impacts of computer technology on society, workforce, and economics. It sheds light on the growing mismatch between human adaptability and rapidly advancing digital technology, leading to a new era of the ‘end of work’. The summary will analyze the reasons for the increasing unemployment rate despite apparent economic growth and how technology is replacing human jobs with staggering efficiency. The book also presents recommendations on how to adjust to this new era and harness the opportunities for both workers and organizations.

Jobs Disappear in the Age of Technology

Our rapidly advancing digital technologies are causing dramatic changes in society, and machines have replaced many workers who can no longer compete. The mismatch between the efficiency of machines and the performance of humans is growing, and machines are working better, faster, and cheaper. Technology does not ask for vacation pay, benefits, or sick leave and can work around the clock, making it a better alternative for companies. During the recession, despite economic indicators showing signs of recovery, unemployment remained at 9.1%, with many workers unable to find jobs. Profits were up and companies invested in equipment, but they did not open their doors to new workers. This book explores the impact of computer technology on our workforce and our economy and why traditional economic indicators may no longer be reliable to indicate economic well-being.

The Future of Work in the Age of Technology

The book discusses three explanations for extended unemployment: cyclicality, stagnation, and the end of work, caused by the rise of digital technology. While some argue that inadequate demand causes economic unemployment, others attribute it to the failure to innovate and extend productivity. Technological achievement is said to cause displacement of workers, leading to the obsolescence of workers, and it will continue to do so, making workers increasingly superfluous. However, the author argues that certain human work skills, like creative services and personal care, are now more valuable than ever, and that society must develop strategies enabling workers to step out in front of the machines instead of racing against them.

The Impact of General-Purpose Technologies

From driverless vehicles and translation services to the exponential growth of computer power and automated capabilities, general-purpose technologies (GPTs) have affected the global economic system. Economists Timothy Bresnahan and Manuel Trajtenberg found that GPTs impel eras of technical progress and economic growth. Computers encourage organizations to work smarter, increasing productivity without the need for more resources. As a result, highly-educated workers are creating value, while average workers struggle to keep up with the machine-driven progress, allowing the super-rich to benefit. While there are worries that machines may replace human labor, it is unlikely to happen in industries like gardening and restaurants. The classification of GPTs includes dynamic innovations that change the overall economic system or have a global impact. Overall, information technology is successfully fulfilling the classic formula for productivity growth.

Solutions for Wage Stagnation

Technology may be responsible for wage stagnation, but policymakers and society can implement solutions to the machine-labor problem to expand innovation and create more human capital across the country. Education, entrepreneurship, investment, and laws, regulations, and taxes are essential areas for implementing solutions. This article provides 19 recommendations, including investing in education, abolishing tenure, increasing time spent in class, boosting entrepreneurship, improving infrastructure, reducing subsidies to financial services, and reforming the patent system. To properly harness the new technology, organizations must innovate and train workers in new skills.

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