Strategic Alliance Magazine Q3 2017 - 24

BO O K R E V I E W: M AC H I N E , P L AT F O R M , C ROW D

mation systems and economics. They co-authored
The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, a New York
Times bestseller published by W.W. Norton & Company in 2014, which discusses the impact of
technological drivers that are reinventing our lives
and economy.
Machine, Platform, Crowd opens with a fascinating
history of the game Go. Remarkable advances enabled the DeepMind programming team to develop a
highly intuitive and complex AI design that beat
master Go player Lee Sedol in a five-game match in

Machines aren't simply
following carefully
codified instructions
provided by human
programmers; they're
learning how to solve
problems on their own.
-Andrew McAfee and Erik Brynjolfsson

Seoul, South Korea, in 2016. Regarded by many as
the best human Go player on the planet, Sedol's chaotic, intuitive, deep, quick, complicated, and creative
style had provided him with an edge over the competition. The DeepMind win is indicative of a sea
change, the authors say: "Machines aren't simply following carefully codified instructions provided by
human programmers; they're learning how to solve
problems on their own," the authors write. "They're
winning at Go, diagnosing disease accurately, interacting naturally with people, and engaging in creative
work like composing music and designing useful objects" (pg. 17). Adding to that, for "the first time in
STRATEGIC ALLIANCE MAGAZINE | Q3 * 2017

human history a near-majority of the world's adults
are now connected with each other digitally, and ...
can also engage in many kinds of exchanges and
transactions, bringing billions more participants into
the modern global economy. We find it difficult to
overstate how important this is" (pg. 18).
Much as electricity displaced steam power at the turn
of the century, which put many successful incumbent
companies out of business, the authors warn that
"because incumbents are so proficient, knowledgeable, and caught up in the status quo ... they are
unable to see what's coming, and the unrealized potential and likely evolution of the new technology.
This phenomenon has been described as the 'curse of
knowledge' and 'status quo bias,' and it can affect
even successful and well-managed companies" (pg.
21). Fascinating case studies provide compelling arguments from the music, telephone, photography,
taxi, and media industries, where new platforms
heavily impact products and profits. The disruption
and economic shift will be damaging for companies
that can't adapt but bodes well for savvy alliance
managers seeking valuable data, new revenue opportunities, and multi-industry partners to advance
their companies.
The authors' discussion is divided into three parts. Part
1 on the "Machine" addresses common concerns about
machines displacing humans, but also makes strong arguments for AI replacing the "dull, dirty, dangerous, or
dear [expensive] tasks" (pg. 100). For example, flying a
plane over fields daily to monitor crops is "dull and
dear," but disappears when small, cheap drones are used
to create "a much deeper understanding of change over
time with a given crop, and ... much more precise targeting of water, fertilizer, and pesticides." The potential
for drone use is extensive, they purport: Insurance companies in need of assessing roof damage; protection for
endangered species from poaching; assessing the status
of oil rigs in the North Sea, to name just a few. In one
study, AI was used to control cooling equipment at a
data center: "The total amount of energy used for cooling fell by as much as 40%, and the facility's overhead ...
improved by about 15%" (pg. 18). The authors decipher
where human intelligence cannot be replaced, but then
raise an undeniable question: Losing your decision-making authority to AI can be uncomfortable,

Table of Contents for the Digital Edition of Strategic Alliance Magazine Q3 2017