As the Second Machine Age (2MA) – driven by digital technologies like cloud, AI and robotics – accelerates innovation, MIT’s Andrew McAfee admits to having some concerns about whether people can keep up but says “I worry even more about trying to halt or channel progress.” The guest of honor at a public CrowdChat last week, he participated in a wide-ranging discussion of the impacts of the massive disruptions being driven by the digital economy.

McAfee is cofounder of MIT’s Initiative on the Digital Economy and co-author with MIT Sloan School of Management Prof. Erik Brynjolfsson of the of The Second Machine Age, Work, Progress, and Prosperity in a Time of Brilliant Technologies. The CrowdChat was a preview of MIT’s one-day event “MIT and the Digital Economy – The Second Machine Age” that will be covered live on theCUBE  and on CrowdChat from 6:00 a.m.-12:00 noon EDT (3:00-09:00 PDT) on Friday, April 10. The questions and answers below are extracted from the much longer full conversation Thursday on CrowdChat. The full transcript is available here.

 The Second Machine Age

Dave Vellante: What is the Second Machine Age?

Andrew McAfee: It’s the current era of tech progress – the one driven by improvement with all things digital. We thought it needed its own designation. When cars start driving themselves and computers become Jeopardy! champs, we’re in a new phase.

Stuart Miniman: How is it different/extended from the Internet revolution?

Andrew McAfee: 2MA is much bigger than the Net – it includes AI, robotics, IoT, etc.

I think there’s still PLENTY of room to automate/instrument/apply technology.

 Race Against the Machine

Dave Vellante: The premise in [Andrew McAfee & Erik Brynjolfsson’s earlier book] “Race Against the Machine” was that as digital technology moves forward, many people are getting left behind. Is the middle getting hollowed out?

Andrew McAfee: Work by my MIT colleague David Autor and others makes it pretty clear that the middle of the workforce is in fact getting hollowed out.

Dave Vellante: You had several recommendations at the end of “Race…” – are you hopeful they can be implemented or are you pessimistic?

Simon Seagrave: As the speed of technological evolution increases, is it a case of humankind reaching a point of not being able to effectively keep up with it (Despite having created it)? And those that do are increasingly few?

Andrew McAfee: I do worry about our ability to keep up, but I worry even more about trying to halt or channel tech progress.

Digital Economics

Dave Vellante: The economics of digital products are software-like where at higher volume marginal costs go to $0 – is this good news or a “race to zero” for companies? Using your concept, does “Winner-take-all Economics” mean there aren’t any “non-zero sum” solutions to the problems you and Erik discussed in your books?

Andrew McAfee: It’s great news if your company wins the ‘winner take all’ contest in these industries.

Jeff Frick: It’s a completely different challenge than operating in an industry with inflationary norm.

Steve Chambers: The barrier to entry is also reduced to zero, isn’t it? Is that what has created Uber with no cars, Alibaba with no inventory, etc.?

Andrew McAfee: See my colleague Marshall Van Alstyne’s work for the best answer to that question. He’s speaking at our London event.

Dave Vellante: Tech has historically been a winner-take-all business: IBM, then Wintel and competitors within their domains (e.g., Cisco, Oracle, Apple) – what’s different?

Andrew McAfee: Yes, the pattern in tech industries is dominance, then disruption. I think this pattern will spread to more and more industries in 2MA [the Second Machine Age].

The importance of education

Q: Jennifer Grady: You talk a lot about the importance of education. For adults living in this Second Machine Age and considering going back to school, what should they consider studying?

Andrew McAfee: Things that computers aren’t good at: empathy, negotiation, physical skills, problem solving, persuasion….

Jennifer Grady: So don’t compete with the robots and don’t try to “learn” them either – go in the complete opposite direction. Interesting!

Steve Kahane: Building off the education topic – Do you feel MIT is doing a good job preparing its student for #2MA? What could universities do better?

Andrew McAfee: @MIT is doing a great job, but it’s got truly impressive raw material (i.e. students) to work with.

I certainly don’t think the humanities have lost their value in 2MA.

Jennifer Grady: The humanities seem to build a level of critical thinking that robots/computers have yet to attain. If this is true, it’s important to stress this as many universities slash their humanities departments in response to 2MA.

What does this mean to businesses?

John Furrier: If I’m a business owner, what does this disruption mean to me? What should I be thinking about and doing to prepare for a digital future always-connected society?

Simon Seagrave: As the speed of technological advance increases, IMHO businesses will need to be looking toward the early technological advancements and decide if, or how, it could disrupt/affect the space in which they operate. If needed, adopt early.

Steve Chambers: That link is hard though. I see SMEs delegating that decision to partners because they see it as “non-core”.

Dave Vellante: It would seem to me the biggest issue organizations face is not the tech but the biz process and skills required to exploit it.

Paul Prusa: The other item is to not be blindsided by the changes coming. As an example, folk talk about driver-less cars disrupting the taxi industry, but auto insurance, car repair, road and construction, the energy industry ALL will be disrupted.

Jeff Frick: If they could disrupt the taxi industry with mobile phones, Google Maps, payment gateways, and game mechanics (no mention of cars BTW) everyone should be looking over their shoulder.

 The above is only a taste of the full discussion. Watch theCUBE on Friday morning and join the CrowdChat around the event to participate in the continuation of this discussion of one of the most important issues of this time.