Brave New World, Brave New Business Models: A Conversation With MIT’s Andrew McAfee

One of the most insightful, pragmatic thinkers about the intersection of technology, business and society lays out his case for the future—and how directors should navigate there.

MIT’s Andrew McAfee will be the keynote speaker at Corporate Board Member’s boot camp for new business models in Cambridge, Mass., May 7-8, 2020.

In a time of incredible technological change, dislocation—and pessimism—there are few more original or insightful thinkers than Andrew McAfee.

Co-Founder and Co-Director of the Initiative on the Digital Economy and a Principal Research Scientist at the MIT Sloan School of Management, McAfee has done as much as anyone over the past decade to reshape the way businesspeople think about technology and its impact on the future. In now-classic business books such as The Second Machine Age and Machine, Platform, Crowd, he outlined— with uncanny accuracy—the way new technologies would come to dominate and reshape business, while offering practical advice about how to take advantage of the opportunity.

This May 7 & 8, McAfee will keynote our 2nd annual Disruptive Technology Bootcamp in Cambridge, Mass, an intense, interactive 2-day workshop—featuring some of the top minds at MIT—specifically crafted for directors looking to master the new business models reshaping the global economy (See agenda).

In his latest book, More From Less, he makes a penetrating case for capitalism as a force for good, and explains the critical role business is playing—and will play—in improving people’s lives. In this special, extended-length conversation, Corporate Board Member talks with McAfee about why he’s so bullish on the present—and the future—and explains where directors must focus on in the boardroom right now. Here’s part one of our interview:

Business and capitalism are taking a real beating lately. You’re making the opposite case about their effectiveness improving the human condition. What do you see there that others don’t seem to be seeing right now? What’s your case for capitalism in the current moment?

Well, part of the case for capitalism is what it’s always been, is that it delivers us goods and services better than any other form of economic organization that we’ve had. And I think relatively few people argue with that these days. The argument, and especially the recent argument, is, yeah, but it eats up the planet whilst delivering all those goods and services to us. And we should be clear, there was a lot of truth to that argument historically.

One of the things I point out in More from Less is that if you look at the industrial era, which is when we really stepped on the accelerator with growth in human populations, growth in economies, when we really started to put capitalism to work around the world, fueled by really powerful technologies, you notice that as economies grew, almost without exception, they took more from the earth to fuel that growth. They took more fossil fuels. They took more fertilizer. They took more ore. They took more cropland. They just kind of, you know, took a bigger jump from the earth every year in order to fuel their growth.

And part of what happened starting 50 years ago with Earth Day in the modern environmental movement, with people saying, “Gang, this can’t continue,” right, “we have to stop this.” And the really deeply weird thing, and a big part of the reason that I wrote More from Less is that we didn’t do what was recommended 50 years ago. And I’m going to oversimplify a little bit. What was recommended years ago was we have to seize control of the economy, because capitalism, left to its own devices, will strip the earth bare. We can’t allow this to continue.

In America, we have a really strong resistance to central planning. But if you go back and read a lot of the things written around Earth Day, there were reasonable people saying, “You might not like this. There’s not really an alternative, because we’re just going to eat up the planet. We’re going to strip it bare.”

The super-weird thing that happened is twofold. First of all, we did not centrally plan the American economy. There was no steel rationing board. There was no fertilizer allocation board set up in America or other rich countries. In fact, quite the opposite happened. More and more of the world started living under more and more capitalistic systems. That is true in, obviously, China, the former Soviet Union, India, Brazil—all around the world there was more and more economic freedom or capitalism.

The super weird that happened, though, and the evidence is most clear in the richest, most technologically-advanced countries like America, is that we actually started lightening up on the planet. What I mean by that is the trend is going downward for total American consumption, not per capita but total American consumption, of things like water for agriculture and cropland and fertilizer and lots of metals and other minerals and paper and timber. The physical building blocks that you make an economy out of, we are now using less of them year after year even as our economy continues to grow.

The reason I think capitalism gets an unfair, bad reputation these days is we think it as this endlessly voracious thing that is just going to keep taking more and more from the earth. I simply don’t think that’s true anymore.

Now I have to add one more thing, which is that there are problems that capitalism and technology, left to their own devices, do not solve. I think capitalism and technology, left to their own devices, take care of resource scarcity problems. I’m really not worried about resource scarcity around the world anymore.

But businesses don’t take care of pollution on their own, and they don’t take care of protecting vulnerable ecosystems and vulnerable species on their own. We need government action for that. We need policy for that. We need an aware public for that. But if we have all four of those things, I call these the “Four Horsemen of the Optimist” in the book, if we have tech progress, capitalism, public awareness of the problems that capitalism doesn’t fix, and responsive government, responsive to the will of its people, then I kind to sit back and think that we are going to simultaneously improve both the human condition and the state of nature.

If you’re a corporate director, where is the right place to be positioning your business for success in the environment you describe?

One obvious thing to do is to be part of and accelerate the energy transition that needs to happen during the 21st century. Every reasonable person that I talk to says, “We’re cooking the planet. It’s us. It is somewhere between bad news and holy-cow-catastrophically bad news. We need to stop it, and we’re not doing enough to stop it.” Among the reasonably smart people I talk to, there’s really broad consensus on that, which is not that surprising. Fifty years ago we weren’t doing enough about other kinds of atmospheric pollution. We’re not doing enough about greenhouse gases right now. Getting out in front of that is a really important, in every sense of the word, thing for businesses to do and for, I think, directors of businesses to do.

And there are lots of different ways to do that. I think a portfolio approach is the right one here. So whether that’s becoming part of the pledge to plant a trillion trees, or to become carbon neutral by a given year, or to lobby for smart energy policies, these are all things that businesses can and absolutely should be doing. I get this really strong sense that if you want to sell products, especially to younger people, if you want to hire younger talent and bring it into your company and have it stick around, you had better not be seen as part of the cooking-the-planet problem.

You talked a little bit about the various technologies that you see shaping our age, where they’re going. What are they? What don’t people, especially business people, often get about them and their impact?

I think we continue to underestimate the fact that we have, in the blink of an eye, interconnected all of humanity for the very first time. That’s a really profound development. Most human beings throughout history grew up in profound communication isolation and information and knowledge isolation. That is simply not true anymore. I think I just saw, I might get the numbers a bit wrong, I think I just saw that there are 5.5 billion adult humans on earth and 4 billion smartphones. That’s a big deal.

So interconnecting everybody for the first time, this is a recent phenomenon, we’re still exploring all of the ramifications from that. I don’t pretend that all the ramifications are negative. This gives bad actors a lot of leverage, absolutely. But I’m enough of an optimist about the human condition to think of the good news is gonna substantially outweigh the bad news. We’re going to get so many more contributors and creators and innovators and creative types all over the world contributing their talents to those kinds of solutions that we need and becoming global customers, becoming global contributors. We’re still underestimating this by a lot.

The other thing that I think we’re still underestimating—despite all the hype that we hear about it—is artificial intelligence and machine learning. When I talk to the people who are contributing to this revolution, I just keep on hearing we’re still warming up, we’re still getting started. I just saw a write-up of, I think it’s the first randomized, double-blind, really really rock-solid research about whether AI can help human diagnosticians with their medical tasks. And the answer is yes, it can.

Okay, that’s the first, first, really gold-standard study out there in the medical literature about this. How much more of that is ahead of us? How much more opportunity are we going to have to improve our logistics networks, or improve our end efficiency, or make internal combustion engines—for as much longer as they’re around—even lighter, more energy-efficient, and more powerful simultaneously? We’re just getting warmed up with this. This is going to unfold over several decades, not just the past several years.

Then finally, the energy technology that I think we are underweighting and undervaluing badly is nuclear technology. Whether that’s nuclear fission, which we’ve had for a while, or this holy grail of nuclear fusion that’s out there. I would bet that’s going to happen during the course of the 21st century. And living in a clean-energy-abundant world will be very different than living in the world that we live in now and better.

What if we got energy to be as cheap as computation is now? What if we could throw energy at our remaining problems, at carbon capture, at desalination, at making deserts grow, at providing higher standards of living to people?

There was this school of thought that I find really pernicious in the first wave of the environmental movement, that said, “We cannot give abundant cheap energy to poor people because they will have too many children, they will over populate the earth, and again, they will strip it bear with their desires.” I find that morally, really, really, really problematic.

I understand why people in low-income countries have a very small amount of patience for people who have already gone through the period of enriching themselves. But we should be really honest. While America was getting rich, we screwed up the environment, we committed all kinds of offenses against the earth that we live on, and we finally became prosperous to care, to afford to care and to start to do a lot better by that. To tell the currently low-income countries that they have to immediately have the same kind of standards of care as we do, and they don’t get to become rich unless they do, man, that’s a problem, but let’s do better than that.

END PART 1 / GO TO PART 2 >