The every-increasing pace of technological innovation, combined with the emergence of Big Data, may have serious social as well as economic consequences for the world.
The current explosion of innovative technologies is inventing a new kind of economy. “Although the new technologies are clearly driving economic growth and higher productivity, the distribution of these benefits is skewed in worrisome ways,” warns David Bollier, author and consultant on economic, political and cultural affairs, in a report which provides a synthesis of talks among twenty-eight experts in a variety of fields at the 21st annual Roundtable on Information Technology at Aspen, Colorado. The talks address the growing concern about the technological displacement of jobs, stagnant middle class income and wealth disparities. The report also examines cutting-edge innovations in personal data ecosystems that could potentially unlock a revolutionary wave of individual economic empowerment.
Imbalance between the pace of innovation and people’s ability to adapt
Paradoxically, one of the most powerful obstacles to innovation is the increasing pace of innovation itself. A key question here is not just the displacement of middle-class jobs, but the speed at which this displacement is happening and the consequent inability of society and the economy to adapt. The industrial revolution witnessed a similar transformation, with traditional jobs being destroyed as new ones were created, but this transformation took place over several generations. At the present time, institutions and social practices cannot keep up with the pace of near-constant waves of innovation driven by the new technologies. These days our skills become obsolete after five years, while disruptive changes are happening ten or even more times within a single generation. This serious imbalance poses a major problem because our society isn’t ready for this level of hyper-accelerated pace change and has neither the policies not the organisations to deal with it, suggests the report.
Bell curve replaced by ‘power-curve’
“Wealth and income distribution no longer resemble a familiar ‘bell curve’ in which the bulk of the wealth accrues to a large middle class. Instead, the networked economy seems to be producing a ‘power-curve’ distribution, sometimes known as a ‘winner-takes-all’ economy,” says David Bollier. In this new technologically-driven economy, riches are concentrated increasingly in the hands of relatively few players rather than being distributed among the whole population. If the new power-curve distribution becomes the economic norm, this could result in greater polarisation of society. Bollier believes that one of the most significant developments impacting innovation is the arrival on the scene of huge databases of personal information. He believes that this Big Data phenomenon is becoming a major component of the new economy.