Erik Brynjolfsson and Andrew McAfee of the MIT Center for Digital Business and the Sloan School of Management have written an interesting book for our times — our economic times — with an appealing metaphor that any technologist will appreciate. Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, is short and to the point and it ought to be required reading.
The subject matter is employment growth or its lack in this rather austere recovery and the effect on future employment and growth. More specifically, it is about the changing relationship between humans and their creation, the computer — the almost-thinking-machine — and how it can out-compete its masters not only in routine manufacturing tasks but, increasingly, in jobs that were once thought to be the exclusive province of human thinking.
The metaphor, from futurist Ray Kurzweil, holds the narrative together and is worth pondering before we continue. It is told in the form of a story about the invention of chess. The emperor, the story goes, was so delighted with the game that he gave its inventor a wish. The sly inventor asked for a grain of rice to be placed on one square of the chessboard two on the second and double the prior square’s total on each succeeding square.
It is the story of exponential growth. Accumulating the sums of rice on the first half of the chessboard was manageable but the second half totals were truly significant, from small beginnings arose a mountain of rice that would dwarf Mr. Everest. McAfee and Brynjolfsson apply Kurzweil’s story to another runaway exponential progression, Moore’s Law. You may not need to be reminded that Moore suggested that computing power would double and its cost halve every 12 months or so. With some fine-tuning the period was raised to 18 months and has continued for virtually the lives of all people in the technology industry today.
But that’s not the crucial part of the story or the book. The authors calculate that we have only recently (in the last few years) crossed over from the first 32 squares of the chessboard into the second half where a metaphorical Everest awaits us. The gains in the second half of the chessboard will likely come from advanced software and algorithms and not hardware per se. They point out that while computing power has increased one thousand fold on the first half of the chessboard, the power and quality of our algorithms has increased 43,000 fold.
The chessboard’s second half is already giving us systems that can diagnose better than doctors, out lawyer lawyers and, of course, kick booty in Jeopardy!. So what will happen next? McAfee and Brynjolfsson are quick to point out that the thinking that machines do is not the thinking of humans. It is often the lightening brute force effort of crunching a great deal of data to ferret out an answer. Also, training a machine to pick up a pencil from a random table top, let alone use it, is still elusive.
The major point of The Race Against the Machine, is that there really is no race, or if you think there is be prepared to lose. But this book is fundamentally hopeful because it suggests that machines are tools that ought to off load people from their rote tasks to concentrate on the creative, entrepreneurial and innovative endeavors that only humans can engage in.
What’s powerful about this argument is that it offers a prescription for a solution: Leverage the machine rather than fight it. Crunch big data in every way you can imagine, ask “What if” questions ad nauseam and above all, innovate.
As I look at CRM and the broader technology world, it seems to me that the subdivided chessboard is visible everywhere. What we once called innovation was surely innovative but it was really no more than automation of what existed before. True innovation starts on square 33 when we realize that all the automation is mostly behind us and innovation means making totally new concepts.
McAfee and Brynjolfsson speculate that we reached square 33 in the middle of the last decade. If true, one of the first true innovations we all witnessed was the social media revolution. Combined with the mobile revolution and today’s quest to master Big Data, we have a potent nucleus on which to invent new businesses, models, and processes.
And if we combine what we know about the chessboard and where we are on it with what we know about our industry we can clearly see that some vendors are simply automating on the first half of the board while others are innovating on the second half.
Let’s not fool ourselves though, simply innovating on the second half of the chessboard is no guarantee of success, just as always, bad ideas will still yield bad results. But it is also true that failing to try, to enter the second half is a sure route to oblivion. This is not simply a matter for the tech sector or even the nation. It’s a large scale economic issue that will affect our species.
Historians and others often debate when specific eras start, because they don’t often follow calendars and precise dates. Some people say that the twentieth century started in 1890 with the closing of the American frontier, for instance. With this as a guide and McAfee and Brynjolfsson’s fine and short book as context, I’d say the twenty-first century started in about 2006.
(Cross-posted @ Beagle Research, LLC)