In their new book The Second Machine Age by Erik Brynjolfsson and Andrew McAfee, mentioned in an earlier post, the authors warn that one downside effect of digitization will be a widening of the gap between superstars and everyone else. They explain:
“Digitization creates winner-takes-all markets because with digital goods capacity constraints become increasingly irrelevent.
When consumers care more about relative performance, even a small difference in skill or effort or luck can lead to a thousand-fold or million-fold difference in earnings. There were a lot of traffic apps in the marketplace in 2013, but Google judged only one, Waze, worth buying for over one billion dollars.”
Perhaps this also explains why Google has just paid $19 billion for WhatsApp. Writing in a similar vein about the implications of the MOOCS (Massive Open Online Courses) for superstar teachers, the Economist predicts:
“The market for instructors will... be transformed. The best teachers will be fabulously productive, reaching hundreds of thousands of students. There may therefore be far fewer of them, each compensated like superstars in the entertainment industry. ”
