The Second Machine Age

The Second Machine Age was an amazing book that gives informative insights about the advancement of Artificial Intelligence and the automation.

Even though the book was published in 2015, and used the advancements until 2015, I can say that some of the state-of-art technologies mentioned is no longer state-of-art, some of them is just old children toy. However the authors giving us a big picture of how the technology is affecting us, and will affect more in the future. I also discovered that there is more recent book by the authors called Machine, Platform, Crowd. I am definitely going to read that too and share the notes here as well for more up-to-date technological overview.

The authors organized the book in a way, that we as a reader first get introduced with the state-of-art(for 2015) technologies, then we read how fast really the technology is advancing, and if there is a limit. After knowing the technology part, we get to know the scope of the effectiveness of new tech. Then as the last parts authors talk about the what it really means for the working force, what should be done to avoid huge problems such as unemployment. They also give some recommendations.

Here I would like to share some of my notes from the book. It’s not fully a summary because I did not put them in that kind of order. I am just sharing some points that I find most interesting/useful.

The era that we live in is most interesting for digitization. We record everything in digitalized format. Let me give you an example about our daily encounter with computers, or let’s generalize, with machines from my one day;

I wake up at 6:00am, and my alarm is set in my smart phone. Of course my sleep tracker program was tracking my sleep patterns during the night, through my smart phone again. Checking emails, listening music, reading books, messaging with friends, writing blogs, and more I am using computer, smartphone, ipad, or some kind of digitalized device to survive daily. Now, let’s try to remember the times that using computer was a luxuary. I believe you will have hard time remembering, not because it was a long time ago but because we are so dependent to them. 15 years ago, electronic devices was not commonly used, but now we cannot think a day, an hour without them.

The reason I wanted you think this is, I want you to be ready for the notes coming…

With the rapid advancement of new technologies, there has never been a better time to be a worker with special skills and/or right education, because those people will be one creating and using those technologies to create and capture value. On the other hand, time we live in is the worst for people with ‘ordinary’ skills because they will face job loss to the smart technologies that could do their jobs.

Our brains are extraordinarily good at taking information via our senses and examining it for patterns, however we are quite bad at describing or figuring out how we are actually doing it, especially when a large volume of fast-changing information arrives at a rapid pace.

The time is changing with an incredible pace, and technology is a huge part of this transition. To show how fast the technology is moving, let’s compare two technologies: ASCI Red, first product of the U.S. government’s Accelerated Strategic Computing Initiative, was the fastest computer in the world in 1996 with a cost of 55 Million US Dollar and it was occupying 1,600 square feet area. ASCI Red was also first computer to reach the speed of 1.8 teraflops (one trillion floating point operations per second). 9 Years later another computer have the same speed with 1.8 teraflops, called PlayStation 3, for only 500 USD and it was smaller than 1/10 of square feet.

Innovation is a big part of the second machine age, when using old technology of GPS is normal but when you add a social part to it, it’s what is called innovation. Waze is the example of innovative GPS application, uses 3 layers; digital maps, GPS location information, and the social data. Waze let’s user to give real-time feedback about things happening around them. Accidents, police, speed of the way, and more could be given by the user of the application. The Waze is turning every car into a sensor to calculate the most accurate speed of the roads and calculates the fastest routes accordingly. It’s a great example of the digitization of everything.

Nasa’s “Open innovation” and “crowdsourcing” is an effective strategy of using technology to open up their innovation challenges and opportunities to more eyeballs which is adopted by many organizations in recent years.

Kaggle is one example of crowdsourcing. It specializes in data-intensive challenges where the goal is to arrive at a better prediction than the submitting organization’s starting baseline prediction.

Latest hype is artificial intelligence, there are a lot of things happening right now, such as IBM’s Watson computer. IBM is applying the same principles that led Watson to win the Jeopardy competition to the task of helping doctors better diagnose what’s wrong with their patients.

Connectivity brings a massive information and leads to a collective knowledge and the open source. With connected smartphones or tablets, people can reach anything in the internet and use the knowledge in their lives. They can be the full contributors in the work of innovation and knowledge creation. It’s no exaggeration to say that billions of people will soon have a printing press, reference library, school, and computer all at their fingertips.

Free learning and knowledge sources are for free, they are adding value to the economy but no dollars to GDP because they are virtually invisible in the official statistics. Better way of measuring the growth could be consumer surplus, which compares the amount a consumer would have been willing to pay for something to the amount they actually have to pay. Even though it’s a better case to measure our economy’s well being, it’s extremely difficult to measure.

Erik and Joo Hee estimated that the internet created about $2,600 of value per user each year none of which is showed up in the GDP statistics, but if it had, GDP growth thus productivity growth would have been about 0.3 percent higher each year.

Another reason for our welfare increase is the having more and more options in goods and services as well as making the existing goods cheaper to obtain.

GDP and productivity statistics overlook much of what we value, so as more data become available and as the economy continues to change, the ability to ask the right questions will become even more vital to actually continue to advance in terms of economic welfare and growth.

3.5 Trillion photos taken from the first photo in 1838, and 10 percent was just in 2014. After digital cameras, now more photos taken every two minutes than in all of the 19th century. Adding photos and sharing them online is with nearly zero cost.

Technology is even helping authors to publish and sell more with the help of digitization and globalization.

Direct management via digital technologies makes a good manager more valuable than in earlier times when managers had diffuse control via long chains of subordinates, or when they could only affect a smaller scale of activities.

Winner-take-all markets are more popular nowadays. Let’s explain winner-take-all markets. Imagine, we have already written compression algorithm which works fine, but when someone comes up with a slightly more optimized faster algorithm, 99% of the people in need of compression will use the new one because it’s little faster. This is the perfect example of winner-take-all markets and similar situations can be seen in different areas of life nowadays.

Why winner-take-all markets are popular? One reason is the digitization factor, Every digital app developer not matter how humble its’ offices or how small its’ staff, almost automatically becomes a micro-multinational, reaching global audiences with a speed that would have been inconceivable in the first machine age.

The Spread of the Machine age and implications of Bounty:

3 important questions,
- Will the bounty overwhelm the spread?
  - Bounty means simultaneously more choice, greater variety, and higher quality in many areas of our lives.
  - If the bounty is great, should we consider rising inequality less of a problem, since people at the bottom are also seeing their lives improve thanks to technology.
  - Bounty brought by innovation and technology makes an average worker a better off than the counterpart in earlier generation
  - As a conclusion however, bounty is not sufficient to compensate for huge increases in spread.
- Can Technology not only increase inequality but also create structural unemployment?
  - Majority of people can be worse off by advances in technology. As demands falls for labor, particularly relatively unskilled labor, wages fall. Can tech really lead to unemployment?
  - Technological unemployment, is an unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses of labor.
- Could globalization explain recent declines in wages and employment?

Even in those areas where digital machines have far outstripped humans, people still have vital roles to play:

Even thought the machines are great at following instructions it cannot idealize something and build on top of that. Let’s give an example of writing a poem. It could read millions of poems and could create a logical syntax but it would not make sense romantically/dramatically.
Ideation is where the humans are still better than the computers and it will be for some time.
Computers are good for answering question until some domain, but they are not good posing new questions. Posing new/right questions are still unique to human and highly valuable.
Ideation, creativity, and innovation (“thinking outside of the box” ) gives humans significant advantage over digital labor.
But working with digital labor will be inevitable, and according to Kevin Kelly “We’ll be paid in the future on how well we work with robots.”
In the current education system we still teaching our children the skillsets that the computers are good instead of ideation. (Very important !!)

Our current education system is no longer relevant to the increasing type of demand. (Sugata Mitra in Ted Talks)

SOLE (Self-organizing learning environment)s are teaching children the skills that will give them advantageous over digital labor.

Maria Montessori, developed the primary education system that emphasize self-directed learning, hands-on engagement and a largely unstructured school day. In the Montessori schools innovators are produced, and as a result of an interview most of the innovators such as Jeff Bezos(Amazon), Larry Page and Sergey Brin (Google), and they all said “they learned to follow their curiosity”.

To stay valuable in the emerging machine age, people should improve skills of ideation, complex communications. There are some tools that you can use to stand out such as MOOCs. Massive Open Online Courses (MOOC) are the best platforms nowadays to obtain skills necessary for mostly free. (In 2011 Sebastian Thrun, announced that he will be teaching his course in AI in MOOC free over the internet. )

Policy Recommendations:

Need to teach children better:
- When technology advances too quickly for education to keep up, inequality generally rises.
- We should improve the education, using technology, emphasizing teacher importance , knowing types of teaching and selecting most relevant.
- Use technology wiser:
  - MOOCs are enabling low-cost replication of the best teachers, content, and methods.
  - Using MOOC’s feedback data we have better chance to improve the education rather then depending on the full government policy change.
- Give more importance to the teacher:
  - Testing is kind of risky because it encourages teaching to the test at the expense of other types of learning.

Not all the news are the good news, bounty brought by the technology increases so the demand and need too. Which makes an inequality. Also, probably first time in human history, we have power to completely destroy our race, and world. (Of course this is just a dystopic theory and an extreme one.) People with really bad intentions could use these technological advancements against humanity, the same technologies we use to cure diseases could be used to create biological weapons such as creating new viruses.

Probably the most far-out (sci-fi) scenario is the development of fully conscious machines. In those scenarios we end up fighting with machine or give up and merge with machines by transferring our consciousness into machines. We don’t think it’s not possible, but having closer threats such as losing a lot of job areas for millions of people is more important and imminent than planet wide war with machines.

As a closing, the technologies we are creating provide vastly more power to change the world, but with that power comes greater responsibility. That’s why this book gives a lot of time to explain what we can do to avoid mistakes that could have catastrophic results. As more and more work is done by machines, people can spend more time on other activities. Not just leisure and amusements, but also the deeper satisfactions that come from invention and exploration, from creativity and building, and from love, friendship, and community. We don’t have a lot of formal metrics for those kinds of value, and perhaps we will never will, but they will nonetheless grow in importance as we satisfy our more basic economics needs.