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Smart machines provide tough competition for middle-class workers

By PAUL WISEMAN, BERNARD CONDON and JONATHAN FAHEY Published: January 25, 2013
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Big data

At the heart of the biggest technological changes is what computer scientists call “Big Data.” Computers thrive on information, and they're feasting on an unprecedented amount of it — from the Internet, Twitter messages and other social media sources, from bar codes and sensors being slapped on things from boxes of Huggies diapers to stamping machines in car plants.

A Harvard Business Review article by Andrew McAfee and Erik Brynjolfsson of the Massachusetts Institute of Technology said more information now crosses the Internet every second than the entire Internet stored 20 years ago. Every hour, they note, Wal-Mart Stores Inc. collects 50 million filing cabinets' worth of information from its dealings with customers.

No human could make sense of so much data. But computers can. They can sift through mountains of information and deliver valuable insights to decision-makers in businesses and government agencies.

“What's different to me is the raw amount of data out there because of the Web, because of these devices, because we're attaching sensors to things,” says McAfee, principal research scientist at MIT's Center for Digital Business and co-author of “Race Against the Machine.” “The fuel of science is data. We have so much more of that rocket fuel.”

So far, public attention has focused on the potential threats to privacy as companies use technology to gather clues about their customers' buying habits and lifestyles.

“What is less visible,” says software entrepreneur Martin Ford, “is that organizations are collecting huge amounts of data about their internal operations and about what their employees are doing.” The computers can use that information to “figure out how to do a great many jobs” that humans do now.

The cloud

As recently as five years ago, businesses that had to track lots of information needed to install servers in their offices and hire technical staff to run them.

“Cloud computing” has changed everything. Now, companies can store information on the Internet — perhaps through Amazon Web Services or Google App Engine — and grab it when they need it. They don't need to hire experts.

Cloud computing “is a catchall term for the ability to rent as much computer power as you need without having to buy it, without having to know a lot about it,” McAfee says. “It really has opened up very high-powered computing to the masses.”

Small businesses, with no budget for a big technology department, are especially eager to take embrace the cheap computer power offered in the cloud.

Smarter machines

Though many are still working out the kinks, software is making machines and devices smarter every year. They can learn your habits, recognize your voice, do the things that travel agents, secretaries and interpreters have traditionally done.

Besides becoming more powerful and creative, machines and their software are becoming easier to use.

People who used to say “Let me talk to a person. I don't want to deal with this machine” are now using check-in kiosks at airports and self-checkout lanes at supermarkets and drugstores, says Jeff Connally, CEO of CMIT Solutions, a technology consultancy, adding: The most important change in technology is “the profound simplification of the user interface.”