The Great Decoupling

Today's digital innovations are doing for brainpower what the steam engine, and related, technologies did for muscle power during the Industrial Revolution. They're allowing us to rapidly overcome limitations and open up new frontiers, say Erik Brynjolfsson and Andrew McAfee, who have studied the impact of technologies on economies for years. The two MIT professors believe this transformation will create abundance. But they warn that there may be a dark side: Though the pie will get bigger, not everyone will benefit equally. As computers get more powerful, companies have less need for some kinds of workers. That shift is contributing to a phenomenon the two academics call the Great Decoupling: For decades, per capita GDP, productivity, private employment, and median family income rose in almost perfect lockstep. But in the 1980s, growth in income began to sputter and then began to drop. Adjusting for inflation, the median U.S. household today earns less than the median in 1998 did. Job growth has also slowed. Similar trends are emerging in most developed countries. In this interview, Brynjolfsson and McAfee explore the implications: who will win (workers with tech and creative skills), who will lose (the middle class), and how business should respond to the coming tech surge (develop ways to race with machines, not against them).

• Economic growth
• Automation
• Human resource management
• Digital transformation