In September 2024, I published a blog post which asked if we are living in an exponential age. In this post, I want to explore how technology can impact the exponential gap that was discussed in that post.
The Exponential gap generates both a financial and opportunity gap between those who benefit from the Exponential age and those who are left behind. Can Technology itself help balance the playing field?
Before we start, I think we should define what an Exponential gap is. The Exponential gap develops between organisations and individuals who can take advantage of Exponential Technology, which leads to Exponential growth, and those who cannot adapt and are left behind. Causing inequality in our society.
How technology drives inequality
The appearance of new technologies often leads to the removal of lower-skilled jobs with fewer higher-skilled jobs. Since the mid 1970’s pay for graduates has increased by 25%, while for those without degrees, it has fallen by 30%.
Since 2000, the largest share of corporate income has gone to the owners rather than the workers. A similar phenomenon occurred between 1790 and 1840 during the Industrial Revolution in Great Britain, during what is known as the Engels pause.
This corporate income increase is even more noticeable in companies that operate in the digital economy. For example, In 1980, General Motors employed 900,000 people with revenues of $66.3 billion. An average contribution of $74.000 per employee. In 2019, Alphabet, the company that owns, employed 120,000 people with revenues of $162 billion, an average contribution of $1.4 million per employee.
The digital economy favours a few companies that dominate specific sectors of the digital economy due to the network effect. Google, owned by Alphabet, dominates search engines. Microsoft dominates desktop operating systems and applications for enterprises and businesses, Amazon dominates online retail, Meta dominates social media, and Apple has its own hardware and software ecosystem.
This drives an exponential gap between the few and the rest of us. Take cloud computing as an example. During the first quarter of 2022, the top three cloud computing providers were
- Amazon Web Services (AWS) (33% of market share)
- Microsoft Azure (22% of market share)
- Google Cloud (10% of market share)
The top three Cloud computer platforms showed year-on-year growth of 34%. Meanwhile, competitors outside the top three saw growth of 20%. This means that their market share is continuing to grow. It is the exponential gap in action.
Technology can be a tool to help improve equality, but only if we learn how to use it
When I was in school in England, the most important subjects were English and Maths. These were the skills on which our pre-digital technologies were built, and they are still critical for us to learn today.
However, I would now add a third skill to these: digital literacy skills. We have to teach our children about computers, as they have drastically changed the world in my lifetime. This does not even consider the potential impact of artificial intelligence or quantum computing in the near future.
I am so glad that I was interested in technology and Computing in my youth, as that interest encouraged me to become digitally literate.
But I would add a fifth skill that secondary school children here in the UK, children who are eleven and up, need to be taught: critical thinking. This skill is typically taught if and when you go to University. In an age of misinformation, you must be able to question what you are told.
All children have to learn these skills to reap the benefits of technology, close the Exponential gap, and reduce inequality in our society.
Conclusion
Ultimately, it is for us all as a society to decide how much inequality we allow between our society’s poorest and wealthiest members.
Technology will always be a double-edged sword that brings benefits and new problems for society. We need to ensure we have the political will to manage our technology, especially as the rate of technological advancement continues to grow exponentially.
Further reading
Exponential – How accelerating technology leaves us behind and what to do about it by Azeem Azhar.
The Register – Cloud a three-player market dominated by AWS, Google, Microsoft
Are we living in an Exponential Age?
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