Book Review - The Second Machine Age

Authors: Andrew McAfee & Erik Brynjolfsson
Title: The Second Machine Age
Year: 2014
ISBN-13: 978-0393239355
ISBN-10: 0393239357


An interesting book. I recommend for students in Economics, MBA/MSC, or any Technology students. Written by two active academics, scientists and thinkers.

The book adds on to this exciting and intriguing topic of the  digitization of economic activities, and its implication on our lives and our societies.
For anyone who wonders why we're seeing high income inequality and unemployment, this book will clear up a lot of mysteries.

The book is extensively footnoted with numerous references to the work of other academics and economists.

The idea

The idea that computers have now reached a maturity that big changes are expected to happen in the near future. We can expect higher productivity growth due to the Internet.
The authors brought known trends like Apple's Siri, Google's driverless car among others.
The authors seem to be hard-believers in Artificial Intelligence (AI) that is "threatening to replace human labor". They took a ride in Google’s self-driving car around the Mountain View campus and surrounding roads with no bump and no hard brake. 

Google named the driving software Chauffeur.

Starting from chapter 7 through 11, the book moves the focus to the effects of technological advances on peoples lives and the study of economics. The authors make the case that income inequality is a consequence of the digitization of economic activities.

US-egocentricity
The authors have a lot to say about the US -like many US authors- and nothing to say about the rest world. They mention Facebook, Google, Amazon, probably the trendiest companies or the silicon valley based ones, but nothing about companies who have been/are innovating, making this technological transformation and change possible; companies like Finnish Telecom giant Nokia, or Swedish Telecom giant Ericsson with its 35 thousands patents & innovations in Mobile networks, making it possible for Google, Facebook and/or Amazon to enjoy Mobility, reaching by that, a new mobile customer segments.
Skype was not invented in silicon valley but in a suburb of Stockholm, capital of Sweden.

Beyond GDP
This chapter start with this amazing quote from Robert F. Kennedy “The Gross National Product does not include the beauty of our poetry or the intelligence of our public debate. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion. It measures everything, in short, except that which makes life worthwhile.”

interesting chapter on the utility of GDP as a metric for measuring welfare. Again, the music industry example was brought up to support the case.
The authors demonstrate, using other examples of the Over The Top services, that GDP is not capturing all productivity generated by these services. Of course this concern is not new, it has been raised before by many economists and non-economists. Economics Nobel prize laureate Joseph Stieglitz is one of them.

Artificial Intelligence, cultural differences and low-cost data workers
The book displays an awareness of how the "likes" of Google, Twitter, Facebook and Amazon already rely on low-cost workers’ smarts to power the companies’ seemingly miraculous information systems.

Computers do not wield the cultural affinities necessary to interpret this kind of cultural elements; but people do.

This is the hidden labor that enables companies like Google, Twitter, Amazon, Facebook to develop products around AI, machine learning, and big data.

Recommendations (chapters 12-14)
This chapter was divided in 3 chapters: recommendations for individuals, policy makers and long- term recommendations. The topic is so important and so complex topic that it requires at least a book in itself to cover it.
Strangely enough, all the recommendations chapters begin with quotes from non-US internationally known names such as Gandhi and Picasso, but it feels like the authors are (again!) speaking to US "individuals" and the US "policy makers.

is the American Dream really over?

Picture borrowed from The Economist online Magazine

I was a teenager when I really ‘met’ America.

I started listening (and later playing) to American music. Bob Dylan, Billy Joel, Simon & Garfunkel, James Taylor, the Eagles were my heroes. In fact, I learned the English language thanks to Bob Dylan; and even before starting to have English courses at school. I remember our English teacher used to ask us to give her a sentence, and I always gave her a difficult sentence from Bob Dylan songs that she could not understand herself. It was funny! You do these kind of things when you’re a teenager, right? She was bit upset, but after few occasions, she started asking me which Bob Dylan sentence she’ll get in the class today.

My second meeting with America was just so sweet. It was my first summer holidays love, a beautiful girl from North Carolina that I met in Rome, Italy. She was staying with her parents in the same hotel and we met there. We were both 16. Looking back at it now, it seemed like t was coming out of a Fellini movie, except it was real and I was the main act.

Reading F. Scott Fitzgerald’s The great Gatsby and watching James Dean in East of Eden was revealing to me this open and free nation full of hope and opportunities for everyone. I was fascinated by all the 60’s/70’s movements in the US; Warhol, Lou Reed. the marches for civil rights and black rights, Martin Luther King, Malcom X. The protest singers Joan Baez, Bob Dylan. Woodstock festival ’69. The Manifestation against Vietnam war, the Bangladesh concert.

A vibrant nation and generations standing up for peace and love in the world.

Coming back to reality, what is left from all that?

The American dream is changing shape. Large disparities between rich and poor. Ethnic America is born. Racism against blacks is amazingly - despite all the sacrifices – a daily news. A new extension of racism is being exacerbated, and it's called islamphobia. Despite the active engagement and responsibility of the US administration and the CIA in several devastating wars, the current American generation does not seem to care. Too busy to follow the Kardashians on TV…

Today, you can become a star without having any talent. Look at the Kardashians! You can become a star because you have won the 2015 US contest for the best tattoo on your shoulder.
Generations of the reality show. Generations kept away from reality.

And it’s getting even worse now, look at the list of candidates running to become the next president of the US of A on November 2016, the most powerful man leading the most powerful nation on the planet.

Have you heard any Trump’s speech? I recommend you to listen to him for 5 minutes, I did it. What a disaster! His plan is simple, build a wall on the Mexican border, a neighbor country. 

The other candidates are not better.

Am I only becoming emotional, nostalgic and overreacting when I remember that Woodstock generation?

Or is this really the end of the American dream? 

I still naively request the Woodstock generation...

Lagos, African megacity with its challenges and sustainable solutions

A recent report from the Population Reference Bureau predicts that by 2050 Nigeria will be one of the 10 most populous nations globally. The country's population is set to rocket to 397 million. With a current fertility rate of 5.5 children born per woman, the population of Nigeria is predicted to surpass that of the whole of Central Africa by 2050.

Photo from https://ng.boell.org

This population boom will impact the whole country, and particularly the already megacity of Lagos; with its 21 million people, Lagos is the third largest mega city in the world after Tokyo in Japan and Bombay in India. And Lagos is about to double in size by 2050!

Until 1975 Lagos was the capital of Lagos state, and until December 1991 it was the federal capital of Nigeria. Abuja has replaced Lagos as the federal state capital. However, Lagos remains the unofficial seat of many government agencies. 
The city’s population is centered on Lagos Island, in Lagos Lagoon, on the Bight of Benin in the Gulf of Guinea.


Lagos means "lakes”, is a name given by the Portuguese settlers. Late 15th century Lagos Island had been settled by Yoruba fishermen and hunters, who called it Oko. The Portuguese first landed on Lagos Island in 1472; they established and developed a flourishing slave trade. The slave trade continued to grow until Lagos came under British control in 1861.
Lagos is the vibrant economic heart of Nigeria. It headquarters most of the commercial banks, financial institutions and corporates. It is also a major Information Communications and Telecommunications (ICT) hub; generating a significant portion of national GDP. The Port of Lagos is Nigeria's leading port and one of the largest and busiest in Africa.
Lagos has a tropical wet and dry climate that borders on a tropical monsoon climate.

I have once visited Lagos few years ago when I was on a short business trip. I was frustrated that the corporate policy at that time was not allowing me to go out for a stroll in town on my own, to get a genuine feeling of the city and meet with the city dwellers. This is usually what I like to do when I arrive at first in a new destination. I still keep the hope to come back one day on a private visit.

The expected population growth will put significant strain on a city already struggling to address its decrepit infrastructure and limited services. The multi-domains problems that the city encounters are huge.  A small percentage of Lagos’s citizens have access to running water. Less than 50 percent of the city has sewage infrastructure. There is a need to solve problems such as frequent power cuts, gridlocked traffic and a shortage of housing and office space. There is a need to develop transportation infrastructure, sanitary waste disposal sites, electrical grids and different urban infrastructure, while at the same time considering the importance of conservation of heritage buildings and century-old colonial architecture.

The problems in the city are similar to all the other mega-cities; traffic jams make transportation inefficient, waste management is malfunctioning leaving tons of waste on the streets, water resources are overused or polluted and inadequate housing, as well as slums, are becoming reality for an increasing number of inhabitants. Crime is unfortunately endemic in Lagos. Property crimes, armed burglaries and car theft, are particularly high, fueled as much by large-scale unemployment as by wide disparities in income. Crime is obviously altering the image of this vibrant, optimistic megacity of Lagos’s.

Traffic congestion is common in Lagos and because of high crime rate, robberies may occur during the peak period. The quality of air is bad due to traffic and industries like in any other mega-city.

Flooding is a big problem in Lagos and the water rises often to the streets and house levels, particularly during the monsoon season.

The demand of water in Lagos is much bigger than the supply.  Sources of pollution of the Lagos estuary include breweries, food processing industries, chemical industries, solid wastes from houses, sawmills and domestic sewage.

Photo: Flooded Street in Ikoyi, Reinvent Media

How to bridge the enormous physical and socio-economic gaps of the city? How to address most critical challenges like energy, water and transportation? How to respond to the huge employment demand from its young population?

Lagos would have to make the people a part of its economic success story and develop an inclusive strategy for growth, which would reduce social unrest because poverty and social exclusion is a major challenge today. Poverty rates range from 16% in Lagos.

Lagos needs to take advantage of one of its largest natural resource - water - to create sustainable living in its lagoon heart.
Architectural innovations such as the Makoko Floating School could reduce population density and create "a truly urbanized African water city.

Photo: from NLEworks.com/case/Makoko_flooding_School

Education is extremely important and is a key to Lagos’s success. Investing in educational public-private partnerships could finance "centers of excellence" providing technical and vocational skills whilst "easing the pressure on higher education."

In short, a gigantic work is expected! It’s a real test bed for smart city projects. It is a fantastic opportunity for city planners, urbanism experts, environmentalists, water specialists, energy experts and ICT professionals to take part in this endeavor and develop urban sustainable solutions in order to make Lagos a smart megacity.

ICT can play a major role in contributing with innovative, sustainable solutions to help solve all the current problems and the ones that are expected to pop-up, due to this dramatic change of the city.
Big data, cloud-based services, and IOT (Internet Of Things) services that intelligently provide real-time inputs will adequately provide smart ICT services. New business models between utility and technology providers can be developed to offer these integrated services. Lagos could particularly become a promising market for ICT service providers. These providers will create and develop the Lagos services ecosystem; mCommerce, mHealth enables greater access to healthcare, mEducation will benefit communities. Smart Grid solutions for smart power management, real-time Fleet & Transportation information system will prevent future congestion in the city and the port areas, and so many other services and opportunities.

I really believe that ICT can play a central role in helping Lagos city to avoid becoming a sprawling, polluted and highly congested megacity, but instead helping the city to grow into a greener, smarter and more livable metropolis.