Diving deep into the digital economy

Artificial intelligence and the digital economy continued dominate headlines in 2018, with digital-native and platform-based businesses continuing to disrupt their legacy competitors, fake news flourishing on social media, and concerns about machines replacing humans on the job reaching fever pitch.

At the forefront of research into these topics stands the MIT Initiative on the Digital Economy, which explores how people and businesses will work, interact, and prosper in an era of profound digital transformation. The initiative released its annual report earlier this month, offering a look back at its work in the last year and a forecast of what’s on the horizon in the next.

David Verrill, the initiative’s executive director, offered a positive outlook on the technological frontier. “Cooler heads are prevailing,” he wrote in the report. “The constant drumbeat of ‘machines taking our jobs’ has thankfully softened, and the hard work of harnessing technology for broader and more equal benefit is gaining traction.”

Researchers at the initiative completed 35 research projects in 2018, including:

• MIT Sloan professor Sinan Aral’s work with his colleagues on the spread of fake news, which many consider to have played a pivotal and influential role in the 2016 U.S. presidential elections. Aral’s research measured how true and false news stories spread on Twitter over the course of a decade. The team found that falsehoods spread faster than the truth, and humans are more to blame than robots for the situation. The study was among the most mentioned scholarly articles of 2018.
• Professor Erik Brynjolfsson and PhD candidate Daniel Rock, along with colleague Tom Mitchell of Carnegie Mellon University, studied the potential for machine learning to displace various jobs across the economy. They found that most jobs will be reconfigured, not replaced, due to machine learning technology. The effects will be seen across all levels of income.
• Professor Alex “Sandy” Pentland and his colleague Alexander Lipton, the founder and CEO of StrongHold Labs and a Connection Science Fellow at MIT, looked into the potential of cryptocurrencies, finding that new technologies such as digital currencies are making it possible to simulate trades and transactions, which could lead to banks becoming unnecessary agents as entities begin to trade directly with each other.
• Professor Daron Acemoglu and Boston University’s Pascual Restrepo researched the relationship between demographic change and automation. They found that workforces with greater numbers of older and middle-aged workers see more adoption of robots and other automation technologies, and predict that countries experiencing greater demographic change will see more rapid technological automation.
• Professor Renee Richardson Gosline studied how technology-mediated experiences lead to better behaviors, focusing on what combination of active and passive interface makes customers more or less comfortable with those technology-driven experiences.

The report also detailed the initiative’s plans for 2019, including additional events, conferences, and continued research into the major topics shaping the digital economy and artificial intelligence.