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Unformatted text preview: lec tric al engineering of the 1880s and the broad
influenc e of elec trific ation on ec onomic growth. Mr Gordon hims elf notes that the
innov ations of the late 19th c entury drov e produc tiv ity growth until the early 1970s ; it is
rather unc haritable of him to as s ume that the pos t2004 s lump repres ents the full ex haus tion
of potential gains from information tec hnology .
And information innov ation is s till in its infanc y . Ray Kurz weil, a pioneer of c omputer s c ienc e
and a dev otee of ex ponential tec hnologic al ex trapolation, lik es to talk of “the s ec ond half of
the c hes s board”. There is an old fable in whic h a gullible k ing is tric k ed into pay ing an
obligation in grains of ric e, one on the firs t s quare of a c hes s board, two on the s ec ond, four
on the third, the pay ment doubling with ev ery s quare. Along the firs t row, the obligation is
minus c ule. With half the c hes s board c ov ered, the k ing is out only about 100 tonnes of ric e.
But a s quare before reac hing the end of the s ev enth row he has laid out 500m tonnes in
total—the whole world’s annual ric e produc tion. He will hav e to put more or les s the s ame
amount again on the nex t s quare. And there will s till be a row to go.
Erik Bry njolfs s on and Andrew Mc Afee of MIT mak e us e of this image in their ebook “Rac e
Agains t the Mac hine”. By the meas ure k nown as Moore’s law, the ability to get c alc ulations
out of a piec e of s ilic on doubles ev ery 18 months . That growth rate will not las t for ev er; but
other as pec ts of c omputation, s uc h as the c apac ity of algorithms to handle data, are als o
growing ex ponentially . When s uc h a c apac ity is low, that doubling does not matter. As s oon
as it matters at all, though, it c an quic k ly s tart to matter a lot. On the s ec ond half of the
c hes s board not only has the c umulativ e effec t of innov ations bec ome large, but eac h new
iteration of innov ation deliv ers a tec hnologic al jolt as powerful as all prev ious rounds
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This document was uploaded on 02/16/2014 for the course MGMT 237 at UPenn.
- Spring '14