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When Machines Do Everything
Artificial intelligence has left the laboratory (and the movie lot) and is in your building. It's in your home. It's in your office. It's pervading all the institutions that drive our global economy. From Alexa to Nest to Siri to Uber to Waze, we are surrounded by smart machines running on incredibly powerful and self-learning software platforms. And this is just the beginning.
To date, we've been enjoyingâwithout even really noticingâvarious forms of âweakâ artificial intelligence (AI). It's how Amazon recommends just the right gift. How Netflix suggests the perfect film for your Sunday evening. Or how Facebook fills your newsfeed. These forms of AI have been welcome little helpers, making our days just a bit easier and more fun. Once we start using them we stop thinking about them. In just a few short years, these machines have become almost invisible to us in our personal lives.
Now AI is transitioning from being our little daily helper to something much more powerfulâand disruptiveâas the new machines are rapidly outperforming the most talented of us in many endeavors. For example:
- Games of intellect: AI platforms can now out-compete us at some of our most challenging gamesâJeopardy!, Chess, and Go. Google's AlphaGo beat world champion Go player Lee Sedol by a score of 4â1 in March 2016.1 This was a convincing win, but not a rout. Yet with the current rate of technological advancement, in just a few years it will be inconceivable for a human to beat the new machines in such games of the mind.
- Driving: The driverless car, while still relatively nascent, is already a better driver than the average person. According to a Virginia Tech study, human-driven vehicles are involved in 4.2 crashes per million miles vs. 3.2 crashes per million miles for the automated car.2 This disparity in safety will undoubtedly grow considerably in the next few years, and driverless cars, which never text behind the wheel or drive drunk, may soon become mainstream.
- Trading: In 2015, six of the top eight hedge funds in the United States earned around $8 billion based largelyâor exclusivelyâon AI algorithms.3 The machine has already won in stock picking.
- Health care: In medicine, the new machine is quickly surpassing the capabilities of human radiologists. Researchers at Houston Methodist Hospital utilize AI software, which interprets results of breast X-rays 30 times faster than doctors and with 99% accuracy. By contrast, mammograms reviewed by humans result in unnecessary biopsies nearly 20% of the time.4
- Law: In the legal profession, AI-enhanced computer systems are conducting discovery and due diligence far better, faster, and cheaper than the most talented team of paralegals in a white-shoe law firm. Multiple studies predict that the vast majority of paralegal work can soon be automated. We may reach a point in the not-too-distant future when relying only on humans for discovery might be grounds for malpractice.
We could go on and on with many more examples, but the point is clear; the new machines have already surpassed human capability in many ways. Moreover, with the geometric growth in the power and sophistication of these platforms, this is only a preview of coming attractions.
Thus, this rapid expansion of AI leads us to ask some big questions:
- Will a robot take my job away?
- Will my company be âUberedâ?
- What will my industry look like in 10 years?
- Will my children be better off than I am?
In the coming pages, we will answer these questions in a structured and practical manner. Based on our cumulative 100 years of experience analyzing and charting shifts in business and technology, we are fully convinced that we're now moving into a new economic era, one that will change the nature of work and the basis of competition in every industry. In this new economy, we will witness an expansion of what is possible and move from machines that do to machines that appear to learn and think.
Like It or Not, This Is Happening
What the World Economic Forum hailed in 2016 as the Fourth Industrial Revolution is now upon us: a time of economic dislocation, when old ways of production give way to new ones, and when those who can harness the power of the new machine will harvest the bounty of economic expansion.5 In the same manner that the First Industrial Revolution was powered by the invention of the loom, the second by the steam engine, and the third by the assembly line, the fourth will be powered by machines that seem to thinkâwhat we refer to in these pages as âsystems of intelligence.â
This is leading to what we call the âknow-it-allâ business, in which leaders and managers can and should have a continuous awareness of all that is occurring in their company's operations. Where we used to guess, now we can know. These new machinesâalways âon,â always âlearning,â and constantly âthinkingââwill soon challenge and enhance the intellect and experience of even the savviest professionals in every sector. There's no way to escape the gravitational pull of these new machines and the business models that enable and leverage them.
As such, whether you are managing a large enterprise or just starting your first job, deciding what to do about the new machineâthis new cocktail of AI, algorithms, bots, and big dataâwill be the single biggest determinant of your future success.
Digital That Matters
For the past decade, we've collectively enjoyed âdigital that's fun.â We've seen the incorporation of Twitter (2006), the introduction of Apple's iPhone (2007), and Facebook's IPO (2012). These companies, along with others, such as Google, Netflix, and Amazon, have been able to generate unprecedented commercial success in terms of customer adoption, daily usage, and value creation by changing how we communicate and socialize. Yet, history will note that we started the digital revolution with the amusing and the frivolous: Facebook posts, Twitter feeds, and Instagram photos. We are using the most powerful innovations since the introduction of alternating current to share cat videos, chat with Aunt Alice, and hashtag political rants. However, that's just the warm-up act, for we haven't yet begun to fully realize the potential of the new machines.
Technology writer Kara Swisher summed it up best when she said, âIn Silicon Valley, there's lots of big minds chasing small ideas.â6 Well, we're entering an era of big brains focused on big ideasâdigital that mattersâusing these technologies to transform how we are educated, fed, transported, insured, medicated, and governed.
While companies such as Facebook, Amazon, Netflix, and Google (sometimes known as the FANG vendors) seem to have established themselves as the presumptive and eternal winners in this space, history will likely remember them as the precursors to a much more momentous and democratic economic shift. The next wave of digital titans probably won't be characterized by start-ups from Silicon Valley; instead, it will be made up of established companies in more âtraditionalâ industriesâin places like Baltimore, Birmingham, Berlin, and Brisbaneâthat figure out how to leverage their longstanding industry knowledge with the power of new machines.
We're starting to see this play out as we collectively work to apply systems of intelligence to help address some of our most vexing societal ills in areas where digital technology is not just entertaining or convenient but also life-altering. Certainly, many of our institutionsâthe pillars of our society and our everyday livesâare ripe for improvement.
For example, worldwide we lose 1.2 million lives to car accidents annually, with more than 94% of these accidents a result of human error.7 In the United States alone, these wrecks cost society over $1 trillion. This is nearly one-third the amount the U.S. federal government collects in individual income taxes.8 Driverless cars promise to save countless lives and heartache.
One-third of all food produced in the world goes to waste. The food wasted in rich countries alone is almost enough to feed all of sub-Saharan Africa.9 By instrumenting the supply chain and applying AI, we could literally feed the world.
Medical misdiagnoses could also plummet. Righ...
