"The way houses get built is going to change, and I think it is going to change pretty dramatically, and the people who you all sell houses to, the American public, is also going to change quite a bit because of technology..." is how Andrew McAfee begins a presentation to several hundred builders at BUILDER's Housing Leadership Summit recently.
McAfee, principal research scientist at the Center for Digital Business at the MIT Sloan School of Management, studies how computerization affects competition, society, the economy, and the workforce. His book, written with Erik Brynjolfsson, was motivated by science fiction coming true.
In this presentation, McAfee details how computers, robots, and machines are getting better, smarter, and more affordable. He also outlines how the middle class is getting poorer, smaller, and more marginalized.
This is great news and bad news all in the same package.
He begins by talking about how humans are pattern-matching creatures. "Our brains are wired to take in a huge amount of information, match it against what we have seen before, and take action on it." The best example of a complex task that machines cannot do, he says, has been driving a car in heavy traffic.
Exhibit A: Google car that has driven hundreds of thousands of miles through traffic and on highways all over America with only two accidents: one when a human was driving and one when the car was rear-ended at a stoplight.
Machines 1, humans 0.
McAfee questions whether humans still have the upper hand in our ability to combine pattern matching with complex communication. Are machines as good as—or even better than—us at taking in information, understanding it, and coming to a conclusion?
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Exhibit B: Watson, IBM’s supercomputer, competed on the game show Jeopardy against the two greatest players. Over the course of three days, the supercomputer collected more than three times the amount of prize money as either of the humans did.
Machines 2, humans 0.
McAfee goes on to suggest humans still outperform machines in physical tasks. “Industrial robots or humanoid robots, robots that can do stuff, have been a bad joke for a long, long time.” Construction, he says, is something robots are just no good at.
Exhibit C: Rodney Brooks’ $22,000 robot brainchild named Baxter can perform a day’s worth of physical work after being trained by a human for as little as half an hour.
Machines 3, humans 0.
What these advancements mean is, no matter the industry, companies are going to be employing increasing amounts of technology and automation. As computers proliferate in the workplace, certain economic statistics start to taper off.
“I think technology is one of the things that is driving this great decoupling of some of the economic statistics that we care a lot about,” McAfee says.
Incomes and Jobs
Since Time magazine declared the computer Machine of the Year in 1983, two main economic factors have felt technology’s blow: median household income and job creation. After 1983, average income began to decrease and has since leveled off. Similarly, the number of jobs created post-1983 tapered off.
McAfee explains that technology is causing an accelerated growth of the gap between productivity and work, forcing the economy to become more polarized. And as the economy gets more and more polarized, the country’s once prosperous middle class is threatened.
“We’re absolutely recreating a superstar economy here,” McAfee says.
And that will have an effect on who buys what kind of house, and for how much?
EXTRA: see Baxter, the robot who can do a day's work: