2011 TheSecondEconomy
- (Arthur, 2011) ⇒ W. Brian Arthur. (2011). “The Second Economy.” In: McKinsey Quarterly, 4.
Subject Headings: Automated Agent Economy.
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Abstract
Digitization is creating a second economy that's vast, automatic, and invisible - thereby bringing the biggest change since the Industrial Revolution.
Introduction
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If I were to look for adjectives to describe this second economy, I'd say it is vast, silent, connected, unseen, and autonomous (meaning that human beings may design it but are not directly involved in running it). It is remotely executing and global, always on, and endlessly configurable. It is concurrent - a great computer expression - which means that everything happens in parallel. It is self-configuring, meaning it constantly reconfigures itself on the fly, and increasingly it is also self-organizing, self-architecting, and self-healing. These last descriptors sound biological - and they are. In fact, I'm beginning to think of this second economy, which is under the surface of the physical economy, as a huge interconnected root system, very much like the root system for aspen trees. For every acre of aspen trees above the ground, there's about ten miles of roots underneath, all interconnected with one another, "communicating" with each other. Sidebar How fast is the second economy growing? The metaphor isn't perfect: this emerging second-economy root system is more complicated than any aspen system, since it's also making new connections and new configurations on the fly. But the aspen metaphor is useful for capturing the reality that the observable physical world of aspen trees hides an unseen underground root system just as large or even larger. How large is the unseen second economy? By a rough back-of-the-envelope calculation (see sidebar, "How fast is the second economy growing?"), in about two decades the digital economy will reach the same size as the physical economy. It's as if there will be another American economy anchored off San Francisco (or, more in keeping with my metaphor, slipped in underneath the original economy) and growing all the while. Now this second, digital economy isn't producing anything tangible. It's not making my bed in a hotel, or bringing me orange juice in the morning. But it is running an awful lot of the economy. It's helping architects design buildings, it's tracking sales and inventory, getting goods from here to there, executing trades and banking operations, controlling manufacturing equipment, making design calculations, billing clients, navigating aircraft, helping diagnose patients, and guiding laparoscopic surgeries. Such operations grow slowly and take time to form. In any deep transformation, industries do not so much adopt the new body of technology as encounter it, and as they do so they create new ways to profit from its possibilities. …
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| Author | volume | Date Value | title | type | journal | titleUrl | doi | note | year | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2011 TheSecondEconomy | W. Brian Arthur | The Second Economy |