The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies

by Erik Brynjolfsson

The college premium exists in part because so many types of raw data are getting dramatically cheaper, and as data get cheaper, the bottleneck increasingly is the ability to interpret and use data. This reflects the career advice that Google chief economist Hal Varian frequently gives: seek to be an indispensable complement to something that’s getting cheap and plentiful. Examples include data scientists, writers of mobile phone apps, and genetic counselors, who have come into demand as more people have their genes sequenced. Bill Gates has said that he chose to go into software when he saw how cheap and ubiquitous computers, especially microcomputers, were becoming. Jeff Bezos systematically analyzed the bottlenecks and opportunities created by low-cost online commerce, particularly the ability to index large numbers of products, before he set up Amazon. Today, the cognitive skills of college graduates—including not only science, technology, engineering, and math, the so-called STEM disciplines, but also humanities, arts, and social sciences—are often complements to low-cost data and cheap computer power. This helps them command a premium wage.