Robots at the "Hannover Messe" trade fair in Hanover, Germany, April 2014.
Morris Mac Matzen / Courtesy Reuters

Recent advances in technology have created an increasingly unified global marketplace for labor and capital. The ability of both to flow to their highest-value uses, regardless of their location, is equalizing their prices across the globe. In recent years, this broad factor-price equalization has benefited nations with abundant low-cost labor and those with access to cheap capital. Some have argued that the current era of rapid technological progress serves labor, and some have argued that it serves capital. What both camps have slighted is the fact that technology is not only integrating existing sources of labor and capital but also creating new ones.

Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of

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  • ERIK BRYNJOLFSSON is Schussel Family Professor of Management Science at the MIT Sloan School of Management and Co-Founder of MIT’s Initiative on the Digital Economy. ANDREW MCAFEE is a Principal Research Scientist at the MIT Center for Digital Business at the MIT Sloan School of Management and Co-Founder of MIT’s Initiative on the Digital Economy. MICHAEL SPENCE is William R. Berkley Professor in Economics and Business at the NYU Stern School of Business.

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