Sunday October 01, 2017
How machines, platforms and the crowd are rearranging the world
It's clear that digital technology is revolutionizing business. From the global scale of companies like Facebook and Google, to crowdsourced funding models like Indiegogo. What's really going on "under the hood," though, and how can smart organizations take advantage of these changes?
Andrew McAfee is principal research scientist at MIT's Sloan School of Management. He's built his career on understanding the digital economy. In the new book, Machine, Platform, Crowd, he and co-author Erik Brynjolfsson argue that three tectonic shifts are driving change. They are: the rise of algorithms and machine learning, the power of platform enterprise, and the strength of the crowd."
Minds and Machines
Andrew and Erik argue that as artificial intelligence takes off, organizations should rely more on machine learning and less on human judgment. "The research is overwhelming," says Andrew. "As good as we are at [judgment], we're also biased and flawed and buggy…In this era of very, very powerful artificial intelligence and machine learning, computers are exercising what we used to call 'judgment' and doing it in superhuman ways."
Products and Platforms
As we've seen in the stratospheric growth of companies like Airbnb, there's a lot of power in being a platform that connects people and companies that want to engage in an activity. "If you build a platform that does that matching well, you get what economists are just obsessed about: this network effect," Andrew explains, adding "[it's] this virtuous cycle where more buyers show up because more sellers do, and more sellers show up because more buyers do."
Core and Crowd
Finally, organizations can harness the power of the crowd to help solve even difficult problems. "Somewhere out there is...some group of people that you don't know, that you would never think to call, and maybe they don't even know that they're good at your problem," Andrew says. "But…they have exactly the right toolkit to let you make very serious progress." And of course, the internet now makes it possible to connect with those people globally.
These shifts present challenges and opportunities for business and other organizations, but they also suggest the skills workers need in the future. When it comes to automation, people still excel in soft skills, and physical expertise.
Andrew says robots still aren't very good at navigating the physical world, so there will be plenty of opportunities for tradespeople like plumbers. "We still need great coaches," he adds. "In the world of medicine of the near future, the brilliant diagnostician might actually take a back seat to the compassionate, empathetic human being."
And while there will be lots of opportunities in STEM fields, "the world is not just an interesting place for those natural computer science geek," Andrew says. "I think there's a lot more opportunity out there."