Race Against the Machine

They think it’s because the pace of technological innovation has slowed down. We think it’s because the pace has sped up so much that it’s left a lot of people behind. Many workers, in short, are losing the race against the machine.

We’ll call this the “end of work” argument, after Jeremy Rifkin’s 1995 book of the same title. In it, Rifkin laid out a bold and disturbing hypothesis: that “we are entering a new phase in world history—one in which fewer and fewer workers will be needed to produce the goods and services for the global population.”

We don’t believe in the coming obsolescence of all human workers. In fact, some human skills are more valuable than ever, even in an age of incredibly powerful and capable digital technologies. But other skills have become worthless, and people who hold the wrong ones now find that they have little to offer employers. They’re losing the race agains

come—namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.

soar to $1 billion. However, the wealth of the median customer, the one exactly in the middle of the distribution, wouldn’t change at all.

We’ll start with skill-biased technical change, which is perhaps the most carefully studied of the three phenomena. This is technical change that increases the relative demand for high-skill labor while reducing or eliminating the demand for low-skill labor.

and focus on working-age households, real median income has actually fallen from $60,746 to $55,821. This is the first decade to see declining median income since the figures were first compiled. Median net worth also declined this past decade when adjusted for inflation, another first.

But at the same time, the computer, like all general purpose technologies, requires parallel innovation in business models, organizational processes structures, institutions, and skills. These intangible assets, comprising both organizational and human capital, are often ignored on companies’ balance sheets and in the official GDP statistics, but t

Digital technologies change rapidly, but organizations and skills aren’t keeping pace. As a result, millions of people are being left behind.

The median worker is losing the race against the machine.