The proliferation of smart tech raises three fundamental questions: What is the nature of work? What does it truly mean to be human? And—let’s face it—how can you make a buck off this? Those with the third question in mind will find a lot to like in the latest book by Andrew McAfee and Erik Brynjolfsson, who became famous with a self-published e-book called in 2011 and even more famous after in 2014.
(W.W. Norton & Co., $28.95) is the most practical of the authors’ excursions yet. It’s written for executives and entrepreneurs trying to make their way in this brave new world of driverless cars and hackathons. Understanding machines, platforms, and crowds “is the key to success in the economy today,” they state in what might be called their value proposition. “Our goal with this book is to help you with this important work.”
The rise of smart machines, the topic of their previous books, is just one of the three forces they now see operating on business. The other two: platforms, such as Facebook, Amazon.com, and Airbnb, which connect people in various ways; and the crowd, which is the collective intelligence of everyone who doesn’t work for your company. The authors’ message is that if you don’t find a way to harness all three, you’ll be like the factory owners who stuck with steam engines after they were rendered obsolete by electric motors.
Each of the new forces has a counterpart from the past. For the machine, it’s the flawed but sometimes still useful human mind. For the platform, it’s products. (For example, Uber Technologies Inc. is the highly valuable platform; a ride is the cheap product it offers.) For the crowd, the counterpart is the core, which means the resources inside the four walls of the organization. The new forces don’t entirely displace the old ones in the authors’ vision—management’s goal is to use each where it’s best suited.
wouldn’t be a McAfee and Brynjolfsson book if it weren’t filled with stories from the bleeding edge that leave you feeling partly enthralled and partly queasy. argued that creativity is uniquely human, but now the authors say “machines are getting quite good at coming up with powerful new ideas on their own.” Machines are also elbowing aside people in jobs that would seem to demand human judgment, like hiring: Google Inc. realized its interviewers were doing a bad job choosing the best applicants, so it handed the decision-making over to software. People still put a smiling face on the system by speaking with applicants, but now they fill out reports that are submitted to the expert system, which uses them and other data to hire.
Platforms are just as revolutionary as machines, as any executive trying to compete with Amazon or Facebook can tell you. Steve Jobs originally insisted that Apple Inc. would make all the apps for the iPhone; turning it into a platform for others to build on was one of his best decisions. McAfee and Brynjolfsson quote an analyst who calculated that during one quarter last year, Apple made 103.9 percent of the total operating profits of all mobile device makers. Samsung Group made 0.9 percent, and all the rest lost money.
To explain the power of crowds, the authors recount how researchers used crowdsourcing to come up with a faster algorithm for sequencing the genomes of large numbers of white blood cells. They posted the challenge along with some test data on Topcoder, an online platform. In a contest lasting two weeks, people from 69 countries submitted algorithms. Most were useless, but a few were outstanding. The three best ran 180 times as fast as the top one from before the contest. It’s apparently common for outsiders to know more than insiders. One explanation: The chance is very small that the people already working for your company when a new field emerges will just happen to be the best in the world at it.
Both authors work at MIT, where they co-direct the Initiative on the Digital Economy. McAfee is a scientist and Brynjolfsson an economist. The authors share the can-do attitude of data geeks, entrepreneurs, and venture capitalists, absorbing their ideas and exuding them back in print and speeches. They’re not here to philosophize, at least not in this book. Briefly raising the question of whether a computer could ever be conscious, they write, “this is not the place to have a discussion of what ‘consciousness’ is—many lives and libraries have been devoted to that suitcase word.”
Although the authors insist that “is not a how-to book,” it’s easy to imagine bosses handing out copies to the remaining human beings on their staff. Each chapter ends with a bullet-point summary and a series of questions that are likely to annoy less business-minded readers, such as: “Are you systematically and rigorously tracking the performance over time of your decisions, judgments, and forecasts made by people and algorithms in your organization?”
is not machine-made; it’s clearly a product of the human mind. But as the third book in a popular series that’s generated TED Talks and visits to Davos, it’s most definitely a platform. And judging from the extensive acknowledgments, which credit everyone from Elon Musk to Jeff Bezos, it’s also a product of the wisdom of crowds. McAfee and Brynjolfsson are already following their own advice.