Machine Age Keeps Unfolding–transforming jobs, firms, and economies

The machine age has been unfolding. We are in the artificially intelligent machine (AI) age. The birth and evolution of machines have been at the root of generating increasing Wealth from scarce resources. Consequentially, machines have been creating, killing, and migrating jobs, growing inequality, and transforming society. For example, according to IMF prediction, AI will impact 40 percent of jobs. Similarly, the World Economic Forum estimates 14 million net job losses worldwide by 2027 due to the rise of the AI machine age. Besides, science fiction writers and movie makers have been painting gloomy pictures of the human race due to the evolution of the machine age—from passive tools to human-like artificially intelligent. Despite this, the evolution of machines has been unstoppable. They have been gaining the ability to take away human roles at work, whether driving automobiles, handling telephone calls or making products in factories.  

Upon watching science fiction movies and getting bombarded with job loss predictions, we are apprehensive about the rise of machines. Ironically, they are made of inanimate material, devoid of by-birth abilities. Human beings add ideas to non-living things, making them eligible to take roles from humans in work, creating wealth and transforming society. Consequentially, they generate and kill jobs, creating uncertainty and stress.

Machines keep gaining eligibility by taking away more jobs from humans, creating the fear factor of a jobless future. Hence, the evolution of machines has become a cause of concern about the future of work and the human race. Such a reality creates intense curiosity about the underlying force of birth and evolution of machines—unfolding machine ages. Curiosity goes further, raising questions about the implication of the evolution of machine age on quality of living standards, wealth generation, creation, loss, and migration of jobs, the industrial revolution, inequality, rise and fall of firms and nations, and the transformation of society.

The underlying force of birth and the rise of machine age

Here are four major driving forces in inventing and evolving machines, unfolding machine ages:

• Delegating roles—humans naturally tend to delegate roles to others to serve the purpose better. They would like things done with minimal involvement. This desire has been at the root of inventing machines.
• Getting jobs done better at less cost—from the economic perspective, human beings have an endless desire to get jobs done better at less cost. Hence, they have been inventing and evolving machines with a Flow of Ideas. For this reason, there has been a growing demand for more capable machines.
• Expanding market and making more profit—to increase profit and expand the market, producers have been after improving the quality and reducing the cost. On the other hand, they have been under pressure to pay more for inputs. Hence, they have been looking for better machines to deal with this conflicting situation.
• Generating increasing wealth from scarce resources—the natural resource stock of the world is limited, and it has been decreasing. However, the wealth supply demand for continued improvement of the quality of living standards of a growing number of human beings has been intensifying. On the other hand, in the raw form, most natural resources do not or make little contribution to human life. Hence, the human race has been after a flow of ideas, in the form of better machines, for deriving increasing wealth from limited resources.

Inspiration points driving the evolution of the machine age

As the objective of inventing machines and evolving them has been delegating human roles in work, designers target imitating human capabilities inside machines. It appears that human beings have three types of eligibility:

• innate abilities—humans have 52 innate abilities by birth in four categories: Cognitive (21 elements), ii. Physical (9 elements), iii. Psychomotor (10 elements), and iv. Sensory (12 elements). Due to them, without education, training, and experience, human beings are eligible to play meaningful roles in work. At the initial stage, designers started imitating physical abilities in machines, like providing energy and manipulating objects. 
• Tacit capability—through experience, human beings acquire knowledge and skills, increasing the market value of experienced people.
• Codified Knowledge and skill—graduates gain codified knowledge and skills from their predecessors through education and training. For example, they learn how to crunch numbers and solve mathematical equations. They gather data and become a source of information.

Unfolding machine age

A machine age is an era when a particular type of machine emerges, unleashing a transformational effect through the Creative Destruction of products, jobs, and firms. Consequentially, economic long wave emerges at the intersection of two machine ages. Besides, due to Disruptive Innovation effects, innovation epiecneter along with economic prosperity migrates across the boundaries of firms and countries. There appear to be five machine ages. The first three have already unfolded. The fourth age, the AI machine age, has started to emerge. It’s not clear whether the 5^th machine age will ever unfold.  

• 1^st machine age, passive tools—it’s not entirely clear about the day human beings started building machines. In the Stone Age, it’s evident humans developed machines by shaping stones to help their hunting and farming jobs done better. Those were passive tools without having their energy. However, we still make many passive tools, such as screwdrivers and utensils. 
• 2^nd machine age, power tools—the advent of the first industrial revolution started the 2^nd machine age. As opposed to humans and animals, machines like steam engines began taking the role of providing energy, leading to the creation of power tools. This 2^nd age of machine continued during the 2^nd industrial revolution. The development of electrical motors, generators, and internal combustion engines started adding a self-propelling role to machines. Hence, human beings began delegating energy-providing roles to machines. 
• 3^rd machine age, having communication and computational capability— the development of radio and telephone communication led to adding communication ability to machines. The invention of semiconductors and its continued progression enabled machine designers to develop software-intensive machines. Consequentially, codified knowledge and skill became the target of delegating to machines. As a result, the demand for codified knowledge and for performing work with the help of machines started to fall.
• 4^th machine age, human-like artificially intelligent machines— Despite the advancement of machines, the human role has remained indispensable in operating machines.  However, the advancement of semiconductors, software, sensors, and connectivity has led to adding human-like intelligence to machines, making them artificially intelligent (AI). Consequentially, the possibility of releasing human roles from the control loop of machines has been opening up, turning the human-free operation of machines in getting jobs done a reality.    
• 5^th machine age, AI singularity—it’s envisioned that those days will show up when machines can gather knowledge and generate ideas for advancing them by themselves. Consequentially, the evolution of machines will continue without the role of humans. Hence, it’s envisioned that the evolution of machines will reach the AI singularity stage when machines will outperform humans in all aspects.   

Machine age driving the industrial revolution

The evolution of machines has been driving industrial revolutions. Here is a snapshot.

• Pre-industrial age—the pre-industrial age has a history of developing passive tools or machines—giving birth to the first machine age. It all started with the shaping of stones. Subsequently, it continued to shape metal and wood.
• First Industrial Revolution—the advancement of steam engines led to the addition of energy, giving roles to machines. Consequentially, the first industrial revolution unfolded. It also coincided with the unfolding of the 2^nd industrial age.
• Second industrial revolution—the advancement of the role of energy-giving was further extended with the development of internal combustion engines and electrical motors. Besides, the development of telephone and radio communication started creating new types of machines, taking the role of sending and transmitting messages from humans. Consequentially, the 3^rd industrial revolution unfolded. 
• Third Industrial Revolution—the progress of imitating codified knowledge and skill through software in giving birth to the 3^rd machine age led to the advent of the 3^rd Industrial Revolution. Humans have lost the market value of storing and retrieving data, manipulating numbers, and solving mathematical equations for machines.  Consequentially, human beings are only required to supply innate abilities in productive activities.   
• Fourth Industrial Revolution—the evolution of machines in taking sensing, perception, and decision-making roles from humans will lead to human-free operation. The emergence of human AI machines marks the advent of the 4^th machine age. The human role in using and making copies of machines will diminish.    

Creation, loss, and migration of jobs due to the unfolding machine age

Along with the unfolding of the machine age, the human role in work has been changing. Jobs have also been migrating across the boundaries of firms and nations.

• Using products—through evolution, machines have been expanding their families. Hence, there is a growing need for human involvement to operate them. However, their evolution has also reduced human roles in operating them. They are on the path of getting operated by themselves, without human involvement.
• Replicating products—due to the expansion of the machine family, there has been a growing demand for human roles in making copies of them. However, the evolution of manufacturing machines and the evolution of products have been reducing human roles in replicating them. Notable, software-centric features require no human role for replication.
• Scientific discovery, inventing, and innovating for evolving machines—the evolution of machines requires human engagement in generating knowledge and producing ideas for incremental advancement, Reinvention, and invention. It has been found that engagement in the evolution of machines as R&D efforts has been exponentially growing—creating high-paying jobs in advanced countries.  
• Job migration due to the evolution—at the initial stage of the evolution of machines causing the first industrial revolution, jobs migrated from farming in rural areas to cities for industrial work. Due to job division and codification of knowledge and skill in manufacturing, during the 2^nd and 3^rd industrial revolutions, the evolution of machines made human workers eligible for industry jobs only for innate abilities. Hence, manufacturing jobs migrated from industrial nations to less developed ones for sourcing low-cost labor advantage. However, evolution has created high-paying R&D jobs in advanced countries. Further evolution of machines will lead to automating innate abilities in replicating, reducing labor, and reversing the migration of export-oriented manufacturing jobs. Besides, it will accelerate the creation of high-paying R&D jobs in advanced countries.

Changing relative complexities in imitating human-like roles in machines

Complexities in imitating human-like eligibilities are not the same. Besides, due to technological advancements, such complexity has changed.

• Innate abilities—some innate abilities, like offering physical energy, became a target of imitating machines due to the invention and evolution of internal combustion engines and electrical motors. Subsequently, the invention of data storage and management capability has led to the ease of imitating memory in machines. However, a few innate abilities, such as recognizing feelings and subtle gestures and imagining possibilities, show high-level complexities to imitate in machines.
• Experience earned tacit capability—once, machines could not imitate human experience. However, the invention and evolution of semiconductors and software have opened the door to codifying experiences and transferring them into machine features. 
• Codified capability earned through education and training—human beings have developed an education and training system for the value of the codified knowledge and skill for acquiring eligibility in work. It has become customary to spend 20 years graduating with college degrees before entering the job market. Before 1950, it was tricky, even impossible, to imitate such capability inside machines. However, that has become the opposite due to the invention of semiconductors and evolution, leading to the ease of imitating codified knowledge and skills inside machines through software. Hence, there is no surprise for surpassing the number manipulation abilities of mathematicians by a simple calculator.   

The rise and fall of firms and economies

Due to reinventions, causing creative destruction and unleashing disruptive innovation effects, machine ages have been unfolding. Hence, there has been a natural tendency for migration of economic prosperity out of innovations across the boundaries of firms and nations.

• Race in incremental advancement—machines are amenable to getting increasingly better and cheaper due to adding and enhancing features. Hence, there has been a race for incremental advancement of machines, fueling migration of prosperity.
• Creative wave of destruction and disruptive innovation—The machine age has been progressing due to the reinvention of matured products by replacing matured technology cores with emerging ones. Consequentially, reinvention waves unleash Creative waves of destruction. Sometimes, they also unleash disruptive innovation effects on high-performing existing firms and nations.
• Migration of invention and innovation epicenters—due to rational decision-making failures, firms and nations dominating the profitable business of matured products of a current machine age fail to drive reinvention waves, causing the next machine age and leaving them to new entrants. Consequentially, along with the progression of the machine age, innovation epicenters, and prosperity keep migrating across the boundaries of firms and nations.
• Winner takes all—notably, semiconductor and software-centric inventions and the evolution of machines have been leading to increasing the quality and reducing the cost simultaneously. Consequentially, the race of driving evolution has been ending up with the winner taking it all—offering the highest quality at the least cost.  
• The rise and fall of firms and nations—as the machine age progresses through the unleashing of creative waves of destruction and disruptive innovation effect, innovation epicenters migrate during the transition from the current machine age to the next. Hence, the progression of the machine age has a natural tendency to cause the rise and fall of firms and nations.

Polarization effect and increasing inequality and wealth accumulation

Although the unfolding machine age is at the core of wealth creation, not everyone benefits equally—causing a polarization effect on jobs at the firm and national levels.

• Firm-level polarization—during the 3^rd and 4^th machine ages, college graduates working at the middle layer of organization, engaged in production like manufacturing, have been suffering from high job loss due to the ease of automation of codified knowledge and skills. On the other hand, firms engaged in technology innovations have been gaining increasing opportunities due to the growing scope of advancing machines. 
• Country-level effect—during the 2^nd age of machines, UK-led Europe experienced a high gain in economic prosperity. However, during the 3^rd age of machines, the USA rose, and prosperity from Europe migrated due to the creative waves of destruction out of reinventions. During the 3^rd age of machines, less developed countries gained low-end export-oriented manufacturing jobs. However, advanced countries gained a significant number of high-paying jobs in R&D and investment management. 
• Increasing value of ideas—in addition to material, labor, and energy, ideas play an important role in creating value in machines. Along with the progression of machine ages, ideas have a growing role in creating value. Hence, idea-producing and supplying countries have been experiencing disproportionate gains from the rise of the machine age.  
• The Natural tendency of monopoly—due to the increasing role of ideas in subsequent machine ages, making products better and cheaper, the race to profit from a flow of ideas has been intensifying. Consequentially, winners with price-setting capabilities have been emerging in the evolution race of many products. Hence, unfolding machine ages have been powering the growing natural tendency of monopoly.
• Growing inequality and wealth accumulation—due to the increase of the role of ideas in following generation machines, winning producers are gaining the price-setting capability to make a profit while compelling competitors to take lower prices and suffer from erosion of profit. On the other hand, due to ideas’ labor, material, and energy-saving roles, many economies are suffering from decreasing revenue from their inputs. Hence, inequality and wealth accumulation have been growing among individuals, firms, and economies.