  I want to start us off by talking
about the importance of
technological progress, and
to do that I want to show
some evidence. You know how
songwriters say, once in
a while, 'I wish I'd written that
song'? The geek equivalent
I think, is, 'I wish I
had drawn that graph
'I want to show you a graph that I
wish I had drawn. It's data
that comes from here in the
UK, and it goes back just
about 1,000 years and
it's a graph about how well
the British worker
was doing. So let me explain
it. What we've got is how many workers
how many people there were in Britain
on the horizontal axis
and then how well they were
doing, what their real wage was
like, on the vertical axis
What you notice there is that
for hundreds of years
  we were doing really poorly
In fact, the only way people
got wealthier is if there
were fewer people
There's a fixed amount of stuff
to go around, and the only way we
got richer is if there were
fewer of us around, and the instant
population increased
we all became poorer as a
result. We were honestly-, this
country was trapped in a Malthusian
hell for hundreds of years
In the 1600s, for reasons
that nobody understands
things got a little bit better, and
then it looked like we were being trapped
in a somewhat more pleasant
Malthusian hell
Then something happened
that completely changed
the course, completely changed the trajectory
of life in this country
and for the first time ever, we
had a happy situation
a virtuous cycle where
people got, on average
better and better off as
there were more and more and
more of them over time. We'd
never ever seen this before
I want to broaden this story out
a little bit. It turns out this is
not particular to the UK
and it's not particular just
to the last 1,000 years
I want to put up a graph that
I did draw, and
show you 4,000 years' worth
of history and
what some of the big stories
in human history have been
over that time. My new favourite
dinner party question is
'What do you think the big stories
of human history have been? 'When
you ask that, here are some of the
results that you see. People will talk
about wars, they'll talk
about empires, they'll
talk about the founding of some
of the world's great religions
Some people will bring up the Renaissance
or the cheery souls will
bring up the plagues and the Black
Death and things like that.
  In grey there are some of
my most frequent
answers to the most important
story in human history. What
you can see clearly from this graph
is that they are wrong
  There's all this stuff going on
Meanwhile, if you look at the black
line, which is how many people there
are on the planet, or
the blue line, which is a really lovely
calculation about how
advanced our civilisations
were, both in the east and the
west. You notice that none of
these big stories bent the
curve of human history very
much at all. We were just
kind of ticking along
And then, honestly, at one point
in time, that curve of
human history went from
boring horizontal to
unbelievably exciting
vertical, basically in the blink
of an eye. The story of what did
that honestly it's a
technology story. It's
not solely a technology
story, but this shift
would not have happened without
the tinkering of James Watt
that led to the steam engine, that led
to the Industrial Revolution
that led to the internal combustion
engine and then electricity and
put humanity on this technologically
accelerated trajectory
that it had never, ever seen
before. Now, this is a really
happy story. It's a fundamentally
happy story. There were some challenges
that came up along the way. These
big shifts are never accomplished
without some challenges. In
this country we had terrible
smog, killer smog
for a while. We had terrible
exploitation of child labour
We don't have those things anymore
here. We made choices as
a people to deal with
the problems. There is no more
child labour in Britain, and
the skies here are cleaner
than they've been since at least
the 1500s. So
challenges come up. What astonishes
me is how good a job we
do of dealing with them. Now
I drew these pictures to tell
you a story about what's going on
right now, because I
honestly believe, and the reason
we titled our book The Second
Machine Age is that all of
us have the really good fortune
to be here at a time
when we're seeing the next
huge leap forward
with technology, the next
amazing acceleration in
technological progress and
it's coming as a result of all
these things we're doing with
our new digital tools
with software and hardware
and networks and robots and
artificial intelligence and
mobile. All this grab
bag of stuff that we have
honestly I believe is really
changing the trajectory of human
history again. To try to make
that point, I want to take you on
a whirlwind tour just
of the past five years
of some of the weird breakthroughs
some of the crazy I believe
they're science fiction breakthroughs
that we've seen just in the past
five years. In 2010
our hosts announced that they
had been driving fully
autonomous cars on
American roads in
traffic with no mishaps
My favourite part, they announced it in
a blog post. 'Here, we're driving
cars completely autonomously.'
My co-author and I had the chance
to ride in one of these cars
a while back, and what I can
tell you is that the experience
of being a passenger in a
fully autonomous vehicle
goes from being terrifying
  to thrilling to boring
in the space of about fifteen minutes
because it turns out the car drives
the way that we're all taught to
in our driver's education classes
and then we forget about it immediately
for the rest of our lives. It
doesn't speed. It doesn't
weave. It doesn't have a middle finger
All it does is go down
the road obeying all
relevant statutes. It's an
amazing technology
and really it becomes a boring
experience very quickly
In 2011
a team at IBM
built a super computer called Watson
that took on the two
best American champions
at one of our national institutions
which is this weird televised quiz
show that we call Jeopardy. It's
been on TV for decades
It's incredibly popular
Watson went up against two
of the best human champions
ever, and it was not even
close. Watson took home
more than three times as much
money as either of the two
humans. They were good sports about
the competition, though. The guy
on the left, his name is
Ken Jennings, he won
before Watson came along
he won 73
times in a row
Most of us think he was genetically
engineered and raised from
birth by ninjas only
to play the game of Jeopardy
  He got stomped by
this piece of technology. He had
a good sense of humour about it. When he
put up his final answer and
he realised what had just happened
he said, parenthetically, a great
motto for The Second Machine Age, 'I
for one welcome our new
computer overlords.'
In other words, in my little domain
the torch has been passed
from human superiority
over to digital superiority
In 2012, our hosts
realised that there are cats
on the Internet.
  That's the silly way to talk about
this advance. What the team actually
did was build a cutting-edge
artificial intelligence system
on top of a million dollars
very specialised hardware
and they fed it a bunch of Internet
video. They didn't try to train
it at all, or tell it what to look
for. They just said, 'You tell
us. What are the themes
What are the motifs? What kinds of
things keep recurring
in this body of information?'
The system thought and came back
and said, 'There seemed to be these things
called faces out there
There are a lot of them. The faces
sit on these things called bodies
and they look like this, and then
there are all these small fluffy
things that the faces seem
really enamoured of. We're going to call those
cats.' The AI
specialist would call this unsupervised
learning. I would call it something
more like induction
or inference or a style
of learning that's really
inherent to all of us
that technologies have historically
been really, really bad
at, and now they're getting
quite good at it. In 2013
one of the researchers on this project
Andrew Ng, realised that
not everybody has a million
dollars of cutting-edge AI
hardware to play with
and he set about trying to democratise
this kind of innovation. Could
he do the same thing
on a much cheaper hardware
platform? He used the
graphics processing units
that are in all of the gaming consoles
that we have, and he was able
one year later, to replicate
the results, not with a million
dollars of hardware, with
$20,000
worth of hardware. 50-fold
improvement for a year. This
makes Moore's law itself
look really unimpressive
This is the kind of improvement
we're seeing in some of these fundamental
disciplines. Last year, Microsoft
announced that not only with Skype
could you make free calls
around the world to just about
anybody, starting in 2014
you could make free calls around
the world to people with
whom you did not share
a language, because Skype
started to enable nearly
real-time translation
between languages. Again
this is very science fiction
stuff. At least one venture
capital company in 2014
gave an algorithm
an actual vote about
which investments to pursue
because they felt it could do a better
job of scanning the entire
environment and being objective
about an investment opportunity
This year is still young
So far, though, we've seen some pretty
amazing things. A team here
in the UK built
another artificial intelligence
system, and they pointed it at
a task. The task
was playing 80s era
Atari video games
I think some people in this room
have probably wasted a lot of time
on those games. They pointed
the system at these games and
they said, 'Learn how to play
them well.' What they didn't do
was try to say what the rules
of the game were, what it was
about, what a good strategy
was for playing this game
well. All they did was say
'You see that number on the upper
right-hand corner? It's called
the score. Your job is to
maximise it. You figure
it out.' That system is now the
world's best player of Space
Invaders, Pong, Breakout
and Battlezone, which
was my personal favourite
as a teenager. I didn't need
to waste all those hours
The system was going to come along
and do a better job of defending
the planet than I ever
could.
  People have been talking recently about
some of the dangers of artificial
intelligence. Elon Musk
talks about summoning the demon
I'm not very worried about
that. I am a little worried
though, that we're summoning the Terminator
Remember in Terminator 2 how
  the robot would rise up out
of that pool of mercury and form
itself?
  I saw something very much like this
earlier this year at the TED conference
While the inventor of this
technology was speaking
a 3D part
formed itself out of
that pile of goo
and just emerged
out of that broth on-stage
while the guy was talking
So the advances that we're seeing
with digital technologies
they're not even combined of the digital
world anymore. They're showing
up in manufacturing. They're
showing up in transportation
This is a revolution that's going
to go all around the planet
and it's going to happen quite
quickly.
  As I mentioned a little while back
there's so much good news here, and
I think this is the best economic
news on the planet. I would broaden
out. I think this is the best news
on the planet full stop
But, as always
there are challenges that are coming
along with it. As I look at
the situation, the challenges
that we're seeing are economic
and they have to do with as
technology is racing ahead
so quickly, it feels like it's
leaving some people behind
Let me show you a little bit of evidence
about what's going on. I'm going to switch
over from the UK to the US
and I want to do something ridiculously
ambitious. I'm going to draw
a graph of the health
of the post-war US
economy with four
lines on it. This is a
terrible over-simplification
but bear with me. Four lines to
summarise the health of the US
economy.
  What you need to know is up is
better on this graph
The other thing you need to know is for
decades after the end of the war
we were doing better
All four of these things were getting
better. They were getting better almost
in lock step and this was what
gave us the large
stable prosperous
middle class that we really
enjoy these days. The four
lines are the things that
you know how economists agree
on absolutely
nothing?
  Here you would get surprising agreement
if you asked a group of economists
to give you these four lines
They would say, 'Got to do output
So here's GDP per capita.'
They'd say, 'You have to do productivity
We're getting better at turning our
inputs into outputs
Are we generating jobs
Are those jobs on average
good jobs?' Let's look at the average
pay. The pay for that person in
the 50th percentile. 'Look
how good a job we were doing for decades
after the end of the war on
those four things. What we've
noticed more recently
is a divergence, a de-coupling
in these things that we care
so much about. Two of them
the grey and the blue, have
continued on a pretty healthy
upward trajectory. We'd
like more, but they're not on
a terrible trajectory. Those are
the two that have to do with output
Either our GDP per capita
or our productivity. Unfortunately
look at those other two. Look
at the green, which is
that 50th percentile
income. It's tapered
off. It's actually heading
slowly in the wrong
direction over time. This
is a challenge. Our job growth
has stalled out as well
  I want to show you one other graph
again covering the entire post-war
history. Before I do
that, though, I need to make one thing
really clear to this group, I
am not a communist
and I need to say that, because I'm about
to show a graph of capital
versus labour, and when
I do that everyone expects me to
have a Che t-shirt on
and start chanting Marxist
slogans, I'm not going to do
that. But we can't ignore the
fact that capital and labour
are moving in some pretty different
directions these days. So
here's capital versus labour
for the post-war period. The
blue line there
are the returns to capital, US
corporate profits
as a percent of the GDP
You notice that they're in a
really healthy place these
days, after that little divot
for the Great Recession. The
red line is the total
amount of GDP paid
out in wages. You
notice that after doing a dance
back and forth for decades
with that red line-, with
the blue line, the red line has
really started to drop off
in a fairly sharp
way just since the turn
of the century. This is not just
a US phenomenon. We're noticing
this over and over. So
I show these graphs to highlight
that there are challenges
coming up in The Second Machine
Age. The question is, 'What
do we do about them?' And
you're hearing a lot of different ideas
about what to do about them. I want
to leave you with a principle
for how to approach these challenges
It comes from a colleague of mine
who studied the Internet and studied
the digital economy so well
and he makes a great observation
Larry Lessig says, 'Look
with our policies, with the
things we do, we have a choice
We can protect the past
from the future, or we can
protect the future from the
past. If we believe
the future is a better place
and I believe that to the
core, if we believe
the future is a better place
then our task is pretty simple
Let's protect the forces of
the past, the people who like
things the way they were
from the people who are trying to take
us into the future. Our job
is to protect the future. 'Thanks all
very much.'
