The digital revolution is transforming the world through exponential growth, digitization, and recombinant innovation, fueling skill-biased technological change that is creating both economic abundance and disparity.
Since the time we can be called human, we have gone through several “revolutions” to reach modern times. These include the Neolithic Revolution, which fundamentally changed the lives of primitive humans, the Industrial Revolution, which served as a bridge from the Middle Ages to the modern era, and the Digital Revolution, which continues to change the world today. Of these, we need to focus on the digital revolution that we are currently living through.
The digital revolution is not just a technological advancement. It is fundamentally changing our way of life, economic structure, social systems, and even the way we think. Whereas past revolutions have replaced or made more efficient human physical labor, the digital revolution is enabling machines to take over human thinking and decision-making in a modern world centered on knowledge labor.
The modern “digital age,” often referred to as the “second machine age” because of its parallels to the industrial age, is transforming the world through three unique characteristics: exponential growth, digitization, and recombinant innovation. Exponential growth means that the rate of technological advancement is moving beyond a simple linear increase and is now exponentially faster. Digitization is the process by which all information is converted to digital form, stored and processed, and recombinant innovation is the process by which existing technologies and ideas are combined in new ways to create innovative outcomes.
So where is digital technology taking us? The authors of The Second Machine Age look at the effects of digital technology from an economic perspective. They discuss the enrichment and inequality that technological advances have created, and argue that universal enrichment is not possible because of the growing inequality, and offer economic, educational, and legal arguments to achieve it.
How is digital technology affecting the structure of the economy? The introduction of new digital technologies has led to widespread automation, which reduces production costs and increases the quality of products and services. At the same time, however, many jobs are lost to automation, leading to increased job polarization. High-skilled workers earn higher wages and have more opportunities, while low-skilled workers lose their jobs or are forced into low-paying, precarious work.
Will smarter machines really bring abundance and prosperity to us all? One of the key factors in this growing divide is skill-biased technological change. In the past, technological change was independent of factors not directly related to technology, such as human factors, but in the modern era, changes in production, information technology, etc. have become dependent on the skills of the workers involved. This is what we mean by skill-biased technological change.
The arrival of a single new “general-purpose technology” is not enough to make a significant impact; real change is achieved by laying the groundwork for “complementary technologies” that utilize the general-purpose technology. This process is ultimately skill-biased.
One of the hallmarks of skill-biased digital technologies is that they replace human work. While there are still some areas where humans are the only ones who can do the job, it’s not impossible that they will be replaced. It makes little sense for humans to try to compete directly with machines in areas that have become the domain of machines. Therefore, it is argued that humans should find ways to “symbiosis” with machines based on their unique and irreplaceable abilities.
However, if the symbiosis with machines that humans need to achieve in the machine age must be based on a certain degree of abandonment, will it ultimately create the harmony that symbiosis seeks? It seems to me that the very technologies and machines we have created to make our lives better are actually limiting them. In some areas, it means we can’t escape their dominance.
The advancement of digital technology has also brought about major social and cultural changes. The accessibility of information and the speed of communication has increased by leaps and bounds, allowing people around the world to connect in real time and share their cultures instantly. While this fosters the fusion of different cultures and creates new forms of culture, it also creates cultural clashes and conflicts.
