Hello,

We noticed you're browsing in private or incognito mode.

To continue reading this article, please exit incognito mode or log in.

Not an Insider? Subscribe now for unlimited access to online articles.

A View from Erik Brynjolfsson

Open Letter on the Digital Economy

A group of leading technologists, economists, and investors propose a new approach to help us adapt to new technologies.

  • June 4, 2015

We are in the early stages of an era of great technological change. Digital innovations are remaking our industries, economy, and society just as steam, electricity, and internal combustion did before them. Like their predecessors, computers and their kin are engines of great prosperity. Progress with hardware, software, and networks is improving our lives in countless ways and creating immense value. To take just a few examples, advances in artificial intelligence are helping doctors diagnose disease; new sensors are making it possible to drive cars more safely; digitization is delivering knowledge and entertainment more widely than ever; and mobile networks are interconnecting the planet’s population for the first time ever. The digital revolution is the best economic news on the planet.

But the evidence is clear that this progress is accompanied by some thorny challenges. The majority of U.S. households have seen little if any income growth for over 20 years, the percentage of national income that’s paid out in wages has declined sharply in the U.S. since 2000, and the American middle class, which is one of our country’s great creations, is being hollowed out. Outsourcing and offshoring have contributed to these phenomena, but we should keep in mind that the recent wave of globalization is itself reliant on advances in information and communication technologies. The fundamental facts are that we’re living in an ever more digital and interlinked world, and the benefits of this technological surge have been very uneven.

Previous surges brought with them greatly increased demand for labor and sustained job and wage growth. This time around, the evidence is causing some people to wonder if things are different. Or, to paraphrase many recent headlines, will robots eat our jobs?

This story is part of our July/August 2015 Issue
See the rest of the issue
Subscribe

We think this is the wrong question, because it assumes that we are powerless to alter or shape the effects of technological change on labor.

We reject this idea.

Instead, we believe that there’s a great deal we can do to improve prospects for everyone. We propose a three-pronged effort.

First, we recommend a set of basic public policy changes in the areas of education, infrastructure, entrepreneurship, trade, immigration, and research. There’s a strong consensus that these can quickly improve America’s economy and the well-being of its workforce.

It’s also time to start a conversation about the deeper changes that will be necessary over the longer term—to our tax and transfer system, to the nature and extent of our public investment, and even to how democracy can and should function in a networked world.

Second, we call on business leaders to develop new organizational models and approaches that not only enhance productivity and generate wealth but also create broad-based opportunity. The goal should be inclusive prosperity.

The corporation is itself a powerful innovation, and one that can do far more than just generate profits and provide a competitive return to those who supply capital and take risk. It is both a tool for transforming ideas into products and services that address society’s challenges, and the means by which many people earn their living. Along with current waves of innovation in technology, we also have an opportunity to reinvent the corporation and our business systems.

Third, we recognize that we don’t have all the answers. So we call for more and better research on the economic and social implications of the digital revolution and increased efforts to develop long-term solutions that go beyond current thinking.

In summary, we believe that the digital revolution is delivering an unprecedented set of tools for bolstering growth and productivity, creating wealth, and improving the world. But we can create a society of shared prosperity only if we update our policies, organizations, and research to seize the opportunities and address the challenges these tools give rise to. Join us

Signed by:

Erik Brynjolfsson, MIT

Andy McAfee, MIT

Steve Jurvetson, Draper Fisher Jurvetson

Tim O’Reilly, O’Reilly Media

James Manyika, McKinsey & Company

Laura Tyson, Haas School of Business, University of California, Berkeley

Marc Benioff, Salesforce

Carl Bass, Autodesk

Joe Schoendorf, Accel Partners

Tim Bresnahan, Stanford University

Vinod Khosla, Khosla Ventures

Jeremy Howard, Enlitic

Michael Spence, New York University

Mustafa Suleyman, Google DeepMind

Scott Stern, MIT Sloan School

David Kirkpatrick, Techonomy Media

Tech Obsessive?
Become an Insider to get the story behind the story — and before anyone else.

Subscribe today
More from Business Impact

How technology advances are changing the economy and providing new opportunities in many industries.

Want more award-winning journalism? Subscribe to Insider Basic.
  • Insider Basic {! insider.prices.basic !}*

    {! insider.display.menuOptionsLabel !}

    Six issues of our award winning print magazine, unlimited online access plus The Download with the top tech stories delivered daily to your inbox.

    See details+

    What's Included

    Unlimited 24/7 access to MIT Technology Review’s website

    The Download: our daily newsletter of what's important in technology and innovation

    Bimonthly print magazine (6 issues per year)

/3
You've read of three free articles this month. for unlimited online access. You've read of three free articles this month. for unlimited online access. This is your last free article this month. for unlimited online access. You've read all your free articles this month. for unlimited online access. You've read of three free articles this month. for more, or for unlimited online access. for two more free articles, or for unlimited online access.