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

by Erik Brynjolfsson

A slightly more complex model allows for the possibility that technology may not affect all inputs equally, but rather may be ‘biased’ toward some and against others. In particular, in recent years, technologies like payroll processing software, factory automation, computer-controlled machines, automated inventory control, and word processing have been deployed for routine work, substituting for workers in clerical tasks, on the factory floor, and doing rote information processing. By contrast, technologies like big data and analytics, high-speed communications, and rapid prototyping have augmented the contributions made by more abstract and data-driven reasoning, and in turn have increased the value of people with the right engineering, creative, or design skills. The net effect has been to decrease demand for less skilled labor while increasing the demand for skilled labor. Economists including David Autor, Lawrence Katz and Alan Krueger, Frank Levy and Richard Murnane, Daron Acemoglu, and many others have documented this trend in dozens of careful studies.17 They call it skill-biased technical change. By definition, skill-biased technical change favors people with more human capital.