strategy+business is published by PwC Strategy& Inc.
or, sign in with:
strategy and business
Published: April 28, 2014
 / Autumn 2014 / Issue 76


Moore’s Law Is Still Changing Everything

In The Second Machine Age, two MIT professors show how the exponential growth of new technologies is remaking the world.

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies

by Erik Brynjolfsson and Andrew McAfee, W.W. Norton, 2014

Saying that the pace of change in today’s business world is accelerating has become a leading cliché among executives and business consultants. But most of us leave it there. You can’t prove it, right? Besides, it’s not like we’re the first people to live through a time of aggressive transformation. Consider how British business leaders must have felt during the reign of King George III, as the steam engine, the cotton gin, and the railroad upended the old commercial world order.

In their new book, however, Erik Brynjolfsson and Andrew McAfee make the case that the cliché is indeed true, and they do it in a highly persuasive manner. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies not only demonstrates that technological change is accelerating faster than ever before, but explains why it’s so difficult for us to get a handle on it. It is a book that will change the way you think about the world, and the future.

The authors start by telling the story of the driverless car. In 2002, the U.S. Defense Advanced Research Projects Agency (DARPA) offered US$1 million to the winner of a race for completely autonomous vehicles; they were to compete on a 150-mile course in the Mojave Desert. When the race was held in 2004, none of the entrants finished the course—in fact, the farthest any got was 7.4 miles. Economists, pundits, and journalists were quick to proclaim that as smart as computers were, driving a car was something they would never be able to do. Brynjolfsson, a professor at MIT’s Sloan School of Management and director of the MIT Center for Digital Business, and McAfee, the center’s associate director, acknowledge that they agreed with the naysayers at the time. But less than six years later, the autonomous car was a fact, and since then, Google’s version has logged hundreds of thousands of accident-free miles thanks to the relentless and exponential gains in computing power and memory predicted by Moore’s Law.

Why was everyone wrong? The authors argue that “our brains are not well equipped to understand sustained exponential growth. In particular, we severely underestimate how big the numbers can get.” They use a tale about the invention of chess, retold by futurist Ray Kurzweil, the current head of engineering at Google, as their central metaphor to show why this is so.

Our brains are not well equipped to understand sustained exponential growth.

The emperor of India, so this version of the story goes, was so impressed with the ingenuity of the game’s inventor that he invited him to name his reward. The inventor asked that the emperor pay him in rice by putting one grain on the first of the chessboard’s 64 squares, two on the next, and so forth—multiplying each subsequent number by itself (or raising it by the power of two).

Such is the power of compounding that by the time you reach the 32nd square, you’ve got 4 billion grains—about the yield of one large rice field. But if you were able to continue to the 64th square, you would have 264-1, or more than 18 quintillion grains of rice—a pile bigger than Mt. Everest, and more rice than has been produced in the history of the world. (Once the emperor figured this out, some versions of the story say, he had the inventor executed.)

It’s the second half of the chessboard where the numbers overwhelm our ability to comprehend them, and that, Brynjolfsson and McAfee believe, is where we are today when it comes to the exponential growth of computing capabilities. They go on to examine the ways that computerized technologies and smarter machines are already remaking the way we work, our business models, and our society. The crucial question is what people are going to do for a living in the second machine age as exponentially smarter machines become capable of doing much of the work done not only by laborers, but also by managers and professionals. These are changes that will come very quickly, conclude the authors, as we venture further onto the chessboard’s second half.

Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.