W. Brian Arthur wrote a very interesting article for McKinsey Quarterly called The second economy (h/t to @justinspratt for the link). Registration is required to view the article but it’s worth it.

Much has been written about digitization and technology’s impact on society, but Arthur takes a fresh approach by looking at the digital economy as an unseen layer underneath the physical economy. He starts by defining communication for this (second) economy:

[Processes] are “speaking to” other processes in the digital economy, in a constant conversation among multiple servers and multiple semi-intelligent nodes that are updating things, querying things, checking things off, readjusting things, and eventually connecting back with processes and humans in the physical economy.

You know, like Siri does. In fact, notice how perfectly Siri fits into Arthur’s central thesis about the second economy:

If I were to look for adjectives to describe this second economy, I’d say it is vast, silent, connected, unseen, and autonomous (meaning that human beings may design it but are not directly involved in running it). It is remotely executing and global, always on, and endlessly configurable. It is concurrent””a great computer expression””which means that everything happens in parallel. It is self-configuring, meaning it constantly reconfigures itself on the fly, and increasingly it is also self-organizing, self-architecting, and self-healing.

These last descriptors sound biological””and they are. In fact, I’m beginning to think of this second economy, which is under the surface of the physical economy, as a huge interconnected root system, very much like the root system for aspen trees. For every acre of aspen trees above the ground, ther’s about ten miles of roots underneath, all interconnected with one another, “communicating” with each other.

Arthur makes it clear that he’s not interested in the realm of Sci-Fi and AI. He’s not sharing a completely improbable vision of the future (well, with the exception of driverless cars, depending on how much of a Google believer you are). And even though nothing he describes is brand new, this idea of a silent, interconnected layer underneath the physical one gives us a new lens through which to view the digitization of our lives.

I don’t want to get all “The End Is Near!” on you, but I’m currently reading Sherry Turkle’s Alone Together – Why We Expect More from Technology and Less from Each Other, and Arthur’s article reminded me of her words of caution:

Now demarcations blur as technology accompanies us everywhere, all the time. We are too quick to celebrate the continual presence of a technology that knows no respect for traditional and helpful lines in the sand.

[A] stream of messages makes it impossible to find moments of solitude, time when other people are showing us neither dependency nor affection. In solitude we don’t reject the world but have the space to think our own thoughts. But if your phone is always with you, seeking solitude can look suspiciously like hiding.

Hopefully there will still be places to hide once the second economy has fully established itself.