All Financial Wisdom
The Economic Future that Comes with Artificial Intelligence
Artificial Intelligence, or AI, opens a new era in the socio-economic paradigm that our economies and societies are addressing. Throughout history, few human advances have been as disruptive as this, which could ultimately mean dispensing with human intellectual capacity for higher order tasks, which are precisely those that add value to human workers, and which for some were the last argument to consider ourselves still necessary as a labor force.
Indeed, Artificial Intelligence opens many doors and, as with any new disruptive human invention, it will involve radical changes in the way we configure and understand our socioeconomies. In this analysis today, we give you the keys so that you can know what AI can mean for your lives or those of your children, and discuss whether there is something to fear about it, or rather something that will allow us to hope to contribute to the progress and transformation of our world as we know it today.
Artificial Intelligence is a technology started decades ago
Briefly summarizing what AI is and where it comes from, I have to tell you that, contrary to what many might think in the heat of the recent popularization of the term, the truth is that it is a technology that has decades of antiquity. Its bases and fundamental concepts go all the way back to 1940. The key is in the evolution of the capacity of processes and storage capabilities of computer equipment, conjugated with the demand that has brought the exponential technification of virtually all aspects of the lives of consumers and users. This has enabled the concept of Artificial Intelligence to fully develop.
Neural networks are one of the disputed bases of Artificial Intelligence
These neural networks allow machines to learn by recognizing patterns, which can later be applied to the digital processing of our environment in general terms. Applications include voice and speech recognition, imaging, or autonomous car navigation. Neural networks allow machines to interpret the reality that surrounds us: one of the main pitfalls in which biological organisms are much more efficient than machines today.
For example, one of the veterans of Artificial Intelligence, Dr. Schmidhuber, published a research article on a technique, called Long Short-Term Memory (LSTM), which is based on providing a type of memory or context to neural networks. The LSTM was based on the principle of not having to restart the learning mechanism from the beginning in each new process, but rather allow it to simply add iterations and/or memory that interprets each new word, image, or whatever, based on the previously observed.
This technique has facilitated the exponential increase in the precision of the algorithms that power many AI machines. So much so that a Google investigator reported that they have successfully used the LSTM technique to reduce their speech transcription errors by up to 49%. A major breakthrough for such groundbreaking inventions as Siri, Google Now, Amazon Echo, and the like.
The economic future after the AI
The truth is that, indeed, with these breakthroughs, mere economic figures do not reliably reflect the reality behind their generalization. Do you think that it would be reliable to measure the impact of the invention of the wheel in our world just taking into account the sales figures of all wheel manufacturers?
Obviously this would not make much sense, and it is true that in these cases there are imponderable figures that change our way of life without being reflected faithfully in purely economic figures. In any case, these figures are significant for many of the economic agents, which is why I include here some of those related to Artificial Intelligence.
As you can read in the IDG article of this link, the estimate of what the AI market has meant in 2016 is 1.7 billion dollars. Somewhat insignificant in the economy as a whole, but it’s expected to increase fivefold until 2020. Here, the progression is more significant than the absolute figures themselves. But there are other indicators that we are currently witnessing a major economic bubble in everything related to AI.
As happens every time you know the future before it materializes, an overinvestment is taking place because all players in the sector want to position themselves for the next business. Thus, there is a real fever of mergers and acquisitions in the sector, as you can read in this news from the Wall Street Journal. Since 2011, 140 mergers and acquisitions of companies with activities related to AI have materialized, of which 40 have been made from January 2016 to early December of this year.
From the tangible to the future
Nowadays, nobody doubts that the data of the users and consumers are an asset that is worth its weight in gold; some even say that it will be a hypothetical currency in the future.
In addition, we all see how our socioeconomies are accumulating huge amounts of data each year on our personal life, our professional life, on the Smart Cities, on so many things that have led us digitizing the planet, that Big Data and is not only a progress, but rather a necessity that will slow progress if not properly addressed.
And how do you think that all that Big Data we are avidly cherishing can be exploited and turned into useful information? Obviously, the answer to the previous question is Artificial Intelligence. Case in point – Ever notice that some of your cloud storage applications offer you unlimited space for your photographs? There are experts who need them to train their image recognition systems in Artificial Intelligence.
And in case the combination of Big Data and AI were not very disruptive, we also have a famous third player entering the game of Artificial Intelligence – The Internet of Things.
With the Internet of Things, we are going to attend to the creation of an authentic army of appliances, vehicles, wearables, and in short, any type of device that is able to collect information and interact autonomously through the internet with servers, with other devices, or with humans. Predictions point to the IoT is going to assume a turnover of $1.5 trillion dollars in 2020.
And what is more important in the face of Artificial Intelligence today: all these IoT sensors and devices will generate huge amounts of data that need to be processed and exploited by AI.
We can not overlook the ability of both androids and AI to join the labor force and the productive means, perhaps making our pension systems and our long-term socioeconomies sustainable. But I would also like to point out to you that, with even more futuristic notes, it is certain that some economists will come to the conclusion that androids could be an excellent way to “flexibilize” both the labor force and the consumer base, being able to easily adapt both populations to needs of each moment of the economic cycle.
Of course, beyond these current and futuristic ideas, it will be necessary to evaluate the ethics of turning off an “intelligent” android for five years to eliminate surplus workers from the labor landscape. Undoubtedly, there will be a time when mankind should reflect on ethical and philosophical issues as we close this post in the following paragraphs, which will have important implications for socioeconomics of the future.
What do you think has been the contribution of human intelligence to the economic progress of the world? In the end it seems to be that, rather than being our competitor, we really need synthetic intelligence to complement the capabilities of the human mind.