Introduction
Recent advances in artificial intelligence and machine learning, which brought us Watson and self-driving cars, mark the beginning of a seismic shift in the world as we know it. But major innovations (defined as widely-used technologies that improve over time and have spillover effects that provoke further advancements) have been around since the beginning of recorded history. From the first metal tools, to the wheel and the printing press, these innovations (dubbed general purpose technologies, or GPTs¹ ) have changed the course of history. GPTs “interrupt and accelerate the normal march of economic progress”.1 In other words, they make humans more productive and increase standards of living. They also help open avenues to new kinds of work.
Erik Brynjolfsson and Andrew McAfee succinctly divide historical progress into two machine “ages”.2 The first machine age dates back to the invention of the steam engine, by James Watt in 1775. This brought about an explosion of innovation, and resulted in an increase of living standards to such an extent, that the average American today has a quality of life that was unimaginable to even the wealthiest nobles of that era. The “second machine age” began in the 1990s, and is characterized by three factors: (1) exponential increases in computing power, known as Moore’s Law; (2) the agility and power of digital technologies (including their ability to replicate ideas and products at zero or low cost); and (3) our creative ability to build off of ideas like building blocks, in order to create innovations (called recombinant growth).3
