The machine age is no longer simply about robots on assembly lines. We are now poised on the threshold of a new era in which artificial intelligence, automation and robotization are reshaping the workings of the world economy. Welcome to the Machine Economy. This concept, loosely based but spreading rapidly, speaks to an economy where machines, powered by progressively sophisticated algorithms, take on an increasingly large share of human labor. Behind it, however, lie deep problems that transcend innovation. A Systematic Transformation A Systematic Transformation The Machine Economy is not simply a question of process rationalization or optimizing factories. It is a fundamental transformation of the very forces driving the economy. Emergence of artificial intelligence (AI) and automation guarantees that ever more sectors, from transport to health care to finance, will be controlled by computer systems, empowered to decide, optimize processes, and learn autonomously without human action. In the new economy, machines analyze information at astonishing rates and with accuracy unfathomable in the human mind. They count stock, optimize production lines and even forecast consumer needs. Where business was formerly people-oriented, algorithms and robots drive business growth, productivity, and profitability nowadays. A Model of Unmatched Efficiency A Model of Unmatched Efficiency Consider the example (and you already know) of businesses like Amazon and Tesla, where automation and algorithms already function in nearly all stages of the process. Amazon uses robots to manage its warehouses, simplify the processing of orders and even forecast customer demand. Tesla, for its part, is developing autonomous cars and using artificial intelligence to automate its production lines. This model can be pure perfection in efficiency. Machinery does not get tired, does not request days off, and can operate 24/7. They also have the ability to reduce human error, cut costs, and maximize production, creating a type of "economic engine" that seems almost limitless. Social Consequences: Work in Decline? Social Consequences: Work in Decline? But this revolution has a price tag. As more work is done by computers for repetitive or even sophisticated tasks, the issue of human labor becomes more serious. Numerous studies warn that numerous jobs will be automated within the next decades and whole industries, from manufacturing to administration, will be fundamentally affected. Will the Machine Economy exacerbate Social Inequalities? Will the Machine Economy exacerbate Social Inequalities? Actually, in a system where only the owners of the most sophisticated machines (tech giants, for example) benefit from the machines, those in the traditional workforce stand to be marginalized. Experts are referring to a future "digital disparity or digital divide ", in which only a select number of educated workers will figure out how to navigate this new economy, leaving others behind. The Inevitable Transition: Redefining Work The Inevitable Transition: Redefining Work So how will people evolve to the machine economy? One of the most controversial is the idea of Universal Basic Income (UBI), an idea that is gaining momentum following the surge of automation. The argument is as follows: if automation replaces a great deal of human labor, a basic income would allow people to live with dignity and would shift part of the dividend that automation produces. Another proposal that has been laid on the table is reskilling. Educating employees with the skills to survive in an AI and robotics-driven world. But then the question arises. In a world where machines already perform most tasks, what kind of human skills will indeed be required? The Risks and Challenges of Machine Autonomy The Risks and Challenges of Machine Autonomy The Machine Economy also poses questions about machine autonomy and security. If computers are independently making economic decisions – and can even move the stock market or other financial system – what if a computer makes a poor decision? As those machines get smarter, they might get smarter than humans and it might become more difficult to control them. The "machine control" scenario is becoming increasingly worrisome. Errant algorithms or technical bugs might cause serious disruptions in core industries, with potentially catastrophic ramifications for the world economy. Subsequently, AI regulation and cybersecurity have emerged as the leading priorities on which the vast majority of governments and institutions are now beginning to put their emphasis. The Future of the Machine Economy The Future of the Machine Economy Finding a balance is difficult at the moment to predict exactly how the Machine Economy will evolve. We are at a point where tech innovation seems to be moving at an exponential rate but where the human, social, and ethical implications are no less pertinent. The Machine Economy is here and it is clear that it will fundamentally change the way we think about work, money and even society. But for this revolution to be beneficial to everyone, there needs to be a balance struck between machine power and human ambition.The magic is in how societies set about remoulding their economic and social frameworks towards embracing this change. In seeking this new economy, it is obvious that the future is for those who can marry technology with humanity. But in order to do this, we must rethink not only the economy but our relationship with machines.
