Machine, Platform, Crowd: Harnessing Our Digital Future

by Andrew McAfee

Now, with blockchain technology, a world of new possibilities has opened up to reverse all these trends. We now have a true peer-to-peer platform that . . . can start to change the way wealth is distributed—how it is created in the first place, as people everywhere from farmers to musicians can share more fully, a priori, in the wealth they create. The sky does seem to be the limit.

As has often been said, we tend to overestimate the potential of new technologies in the short term, but underestimate it in the long term. And we think it’s very easy to underestimate the new distributed ledgers and their kin. Satoshi Nakamoto, whoever that is, really did bring something new and powerful into the world.

decentralized, purely crowd-based entities like The DAO will ever be economically dominant, no matter how technologically solid they become. They simply can’t solve the problems of incomplete contracting and residual rights of control that a company solves by letting management make all the decisions not explicitly assigned to other parties. Smart contracts are interesting and powerful new tools and there will be a place for them, but they don’t address the fundamental problem that keeps companies, as it were, in business.

Deming was also able to assess demand shifts for what he calls the “social skills” of coordination, negotiation, persuasion, and social perceptiveness.

Not all of these jobs are managerial, but it’s clear that the economy as a whole has, over the years, been demanding more of the things that good managers excel at: sensing people’s emotions and priorities, and getting them to work well together.

remove the need for the “transmission belts” of the organization, which is our MIT colleague Paul Osterman’s excellent image of middle managers. These people solve small problems, escalate large ones, interpret and clarify communications both upward and downward, negotiate and discuss with their peers, and exercise their social skills in many other ways. The old definition of a great lawyer is one who makes problems go away before they show up in court. Really good managers are much the same; they make the transmission of an organization work smoothly, and prevent it from seizing up.

valuable is that most of us don’t find numbers and algorithms alone very persuasive. We’re much more swayed by a good story or compelling anecdote then we are by a table full of statistically significant results. This is another of our cognitive biases, obviously, but one that none of us can afford to ignore. So, smart companies invest heavily in the gentle art of persuasion, not only of their customers but also of their own people. This is why, as Deming found, analytical ability is even more valuable when it’s paired with high social skills; this combination is what helps good ideas spread and be accepted.

I just said, “That sounds pretty cool. Keep going.” And he did. It’s funny, [Udacity founder] Sebastian [Thrun] says it the best: “When we make a change to the mobile app, I find out because it’s in the app store.” There’s no product reviews here, there’s no sense that you must clear your idea with Vish or anything like that. I don’t have this absolute perfect filter of what should be in the market and what shouldn’t, let alone the creativity to do it all. So why not tap the collective brains of everybody here?

The success of a venture almost never turns on how much technology it can access, but on how its people use that technology, and on what values they imbue in the organization.

So we should ask not “What will technology do to us?” but rather “What do we want to do with technology?” More than ever before, what matters is thinking deeply about what we want. Having more power and more choices means that our values are more important than ever.

crowd. And in addition to the principles we describe, many other factors, of course, are involved, from the creativity of a good designer, to the support of a key business partner, to the luck of a technical breakthrough.

Network effects, economies of scale, complementarities, two-sided networks, learning curves, and a variety of other factors can create very strong path dependencies, amplifying the impact of small initial decisions.

Noneconomic forces are also important. A successful organization creates a sense of purpose, a mission, and

A study published in January 2017 by James Manyika and his colleagues at the McKinsey Global Institute estimated that “about half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies.”

At the same time, there’s never been a better time to be a person with the skill, talent, or luck to produce a good that can be delivered via the global digital infrastructure. Being able to reach millions or even billions of customers makes it possible to create and capture value on an unprecedented scale. This value creation is an engine of growth far beyond what is reflected in the official GDP or productivity statistics. Now there are huge opportunities to have more people contribute and to use technology to create more widely shared prosperity.

This potential increases the importance of having clarity in our goals and thinking more deeply about our values.