Towards a New Distributional EconomicsTim O’Reilly

@timoreilly

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BRIE – OECD

December 1, 2017

Tim O’Reilly

Founder & CEO, O’Reilly Media

Partner, O’Reilly AlphaTech Ventures

Board member, Code for America

Co-founder, Maker Media

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What the great technology

platforms teach us about the future

of work, business, and the

economy.

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Fitness Landscapes

The way in which genes contribute

to the survival of an organism can

be viewed as a landscape of peaks

and valleys.

Through a series of experiments,

organisms evolve towards fitness

peaks, adapted to a particular

environment, or they die out.

Image source: http://evolution.berkeley.edu/evolibrary/article/side_0_0/complexnovelties_02

Technology also has a fitness landscape

In my career, I’ve watched a

number of migrations to new

peaks, and I’d like to share with

you some observations about

what happened, and why.

Personal

Computer

Big Data

and

AI

Smartphones

Apple

Divergence of productivity and real median family income in

the US

Will there really be nothing left for people to do?

Is there really

nothing left for

humans to do?

We’ve forgotten the lessons of history

The weavers of Ned Ludd’s rebellion couldn’t imagine…

They couldn’t imagine…

What happened when Amazon added 45,000 robots

Jeff Bezos calls this “the flywheel”

A Business Model Map of Uber

Magical user experience

realizing the power of

networked sensors

Replacing ownership

with access

A platform, not just a

company

An algorithmic matching

marketplace

Cognitively augmented

workers

The coming robots are not autonomous

Gradually, then suddenly

1. The world is becoming digital

2. Artificial Intelligence and algorithmic systems are

everywhere

3. Knowledge is embedded into tools

4. We are creating new kinds of partnerships between

machines and humans

The Equinix NY4 data center,where trillions of dollars change hands

What does it mean that these

platforms, and the humans that are

part of them, are increasingly

managed by algorithms?

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“Markets are outcomes”

- Mariana Mazzucatto

“My grandfather wouldn’t

recognize what I do as

work.”

-Hal Varian

A new kind of management

“It’s the difference between ‘playing

Caesar’ (deciding which projects live

and die), and ‘playing the scientist’

(being perpetually open to search and

discovery.)”

- Eric Ries, The Startup Way

Algorithmic systems all have an “objective function”

Uber and Lyft: Pick up time

Google: Relevance

Facebook: engagement

Scheduling systems used by Walmart, the Gap, or

McDonalds: reduce employee labor costs and benefits

Like the djinn of Arabian mythology, our digital djinn do

exactly what we tell them to do

AI is “the most serious

threat to the survival of

the human race”

Elon Musk

The runaway objective function

“Even robots with a seemingly benign

task could indifferently harm us. ‘Let’s

say you create a self-improving A.I. to

pick strawberries,’ Musk said, ‘and it

gets better and better at picking

strawberries and picks more and more

and it is self-improving, so all it really

wants to do is pick strawberries. So

then it would have all the world be

strawberry fields. Strawberry fields

forever.’ No room for human beings.”

Elon Musk, quoted in Vanity Fair

https://www.vanityfair.com/news/2017/03/elon-musk-

billion-dollar-crusade-to-stop-ai-space-x

The Runaway Objective Function Behind Fake News

And yet…. Divergence of productivity

and real median family income in the US

“The art of debugging is

figuring out what you really told

your program to do rather than

what you thought you told it to

do.”

Andrew Singer

Andrew Singer

Who Gets What – and Why?

Can we redesign markets so that they are

more effective? There’s lots of evidence

that we can.

What would it take for us to

Put people to work tackling the world’s greatest problems?

Treat humans as assets, not liabilities?

Create an economy based on caring and creativity, while machines focus

on repetitive tasks?

Apply on-demand marketplace models to healthcare, augmenting

community health workers with telemedicine and AI?

Give everyone access to knowledge on demand, whenever we need it?

Have fresh approaches to public policy based on what is possible now,

and by learning what works, rather than picking from set political menus?

What’s the Future?

It’s Up To us

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