The Artificial Intelligence and Machine Learning Business Revolution

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A thought provoking article contributed by the Adoriasoft team.

When the industrial revolution started, people had no idea that it would end up changing the whole world. Too many people simply categorize the industrial revolution as just the ability to produce more and new products and do not realize how it fundamentally changed our way of living. The biggest difference it made was the huge decrease in worldwide poverty. The working conditions in the beginning of the industrial revolution were horrible for the lower class – there’s no spinning it positively.

However, as the industrial revolution went on and laborers fought for their rights, we started to enter an era of global posterity. Yes, people were still not rich, but they were much less poor than they were before. The industrial revolution launched new products but it also launched new buyers for those products. The Intelligence Revolution may cause an even bigger change in society. We cannot predict what the change will be but we can see how the changes that are coming will shock the foundations of our society. Surprisingly enough, there hasn’t been as much discussion or debate about our future in a world with artificial intelligences. The biggest reason is that people simply do not realize how deep the changes will be, because of our limited vision.

The Frogs in the Well

There are many articles which talk about how machine learning, business intelligence, and artificial intelligence will allow us to make better business decisions. This is the result of our limited vision which can only see the technology of the future through the business processes of today. There’s an old fable about a frog that was born in a deep well. Since it could not climb out, it lived its whole live in the well. One day there is a flood, and another frog from the outside gets thrown into the well. They begin talking and the frog in the well cannot believe the frog that came from outside. When the other frog tells it about the sea and fields of grass, it refuses to believe such as thing is possible. The frog had spent its whole life inside the well; it could not even begin to fathom that there could be anything else possible.

The Internet has already disrupted how businesses work

At the beginning stages of a technology as revolutionary as AI, we are all frogs in the well. When we are told that a new tool is being developed, we immediately start thinking of how it will be used by business of today, forgetting that the technology will also give rise to businesses of tomorrow that may operate by completely different metrics. The internet is a great example of this. Look at how many old and established companies, that had decades of experience, were completely blindsided by internet business.

Blockbuster was a video rental behemoth and it got decimated by Netflix, even though Netflix was a very new company and did not have the financial resources that Blockbuster did. Netflix now has around 80 million subscribers. Blockbuster should have been the one to start an internet streaming service, but instead, they tried to implement internet in their current service model and failed.

Look at Sears as well. Sears should have been Amazon – they had been working on delivering products for almost a century. They were the place people looked at a picture and placed an order. They had the infrastructure to become Amazon. Instead, they tried to continue on with their old business model and were easily beaten by Amazon. Now, the company has more than 244 million users. Competitors which Sears and Blockbuster didn’t even think of ended up being the winners.

There are many more similar examples. Look at Hilton group – they have more than 4,700 hotels, motels, and resorts all over the world under their control. They are a very competitive company and had been performing excellently at keeping competitors out of their key markets. Then they were blindsided by AirBnB.

AirBnB does not own a single location; it just allows people to share their homes. Travelers nowadays know that they can get a place to stay at much better rates through AirBnB and Hilton Hotels (as well as other groups in the hospitality industry) are facing losses. Look at Uber – they don’t own a single car yet they are the biggest cab company in the world and normal taxi drivers don’t know how to compete with them.

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Artificial Intelligence will be the biggest change ever

Artificial intelligence (along with machine learning, business analytics, and big data) will have an impact much larger than any of the recent technologies did. This is because AI fundamentally changes the role of humans in businesses. Think of what the industrial revolution did – it removed the limitation of physical labor. Previously it was impossible to make something of a consistent quality even if you had a thousand employees working for you. The introduction of machines meant that hard work done by hands was no longer the highest form of work we had.

Suddenly we could create machines and products that were exactly according to the specifications. Eventually the industrial revolution helped us bring about technology that wouldn’t have been possible otherwise. Products like televisions, computers, and smartphones were impossible before the industrial revolution. The revolution told people that they could focus on the intellectual side of the business while the physical side was slowly supplanted by machinery.

Artificial intelligence does the same thing except it isn’t replacing or improving upon our handiwork – it is a replacement as well as an improvement over the way we think. These days you cannot imagine a company that stops using factories and instead goes back to people making things with their hands. It would be impossible for such a company to be competitive and to survive in a world where other companies are making products at a much faster and accurate rate than them. Artificial intelligence will make the same true for business decisions. You can read about this topic in much more detail in this report by Harvard Business Review.

AI wouldn’t help upper management; it will become upper management

Right now the image we have of artificial intelligence and business intelligence is that it will allow executives to make better decisions than ever before. We envision a CEO opening up a dashboard and receiving reports from the artificial intelligence about latest updates of the market and recommendation from the artificial intelligence. That is because we are thinking about artificial intelligence with our limited worldview. We are thinking about how AI will be implemented in our current business models. Instead we need to think about what AI will replace and what it will change. The industrial revolution replaced manual labor. The computer age replaced bookkeepers and clerks. The information age replaced print media, postal workers, and much more. The intelligence age may just go on to replace management itself.

Why is management in danger from Artificial Intelligence? The answer is simple; it can manage better than a human possibly can. When we create an artificial intelligence we will be creating a system that can ponder a million possibilities at once and come up with the right answer. In the beginning AI will merely be giving suggestions and ideas to a human manager and the human manager will have the final say on the decision. Eventually companies will recognize that the AI is giving much better ideas than any managers can and will begin to replace managers with AI. AI will slowly crawl up the management circle as it becomes more capable and there may be a time when there will be no need to have a CEO leading the company. It seems impossible right now but think of how many things seemed impossible a hundred years ago. People walking on the moon, instantaneous communication devices in our pockets, virtual reality, yet all of them are very possible in our times.

The whole process will begin with one company being totally controlled by AI. It will probably start with a visionary CEO letting an AI control a whole division of their company. Then it will be found out that the AI takes factors into consideration that people weren’t even aware of. Slowly the division will begin to outperform other divisions and then the whole world will be looking for an AI that can provide them with a better return on their investments. The process will be started by CEOs but it will end up making the role of the CEO itself useless.

6 ways AI can manage work better than us

A lot of people disagree with the idea that managers can be replaced by artificial intelligence. They say that the work of a manger is mostly to talk to other people like human beings and no artificial intelligence can replace that. Let’s break down the many different reasons this argument may not be correct.

Managers are there to manage work, not people – When a company hires a manager, its aim is to make sure that the work is being managed properly. Yes, they manage people but they manage people so they can get the work done. Ask any manager and the will tell you how their number one priority is to ensure that the task assigned to their team is completed. They have to work through people – solving human issues – in order to make sure that the work gets done.

Managers are often inefficient – Anyone who has spent some time working in offices will be able to tell you that there are far too many bad managers in the business world. There are managers that have the wrong ideas and make the wrong decisions. These are managers that end up directly hurting the company. If people were so good at being managers that there was no need to find something better, then maybe we could have considered that management will be here to stay after the rise of artificial intelligences.

Good managers are those that keep all the factors in mind and come up with the best solution. That is exactly what we are modeling our artificial intelligences to do. We are trying to create artificial intelligences that take the perfect decision every single time and take every single factor into consideration. The task is completely beyond the abilities of a human being.

Humans make things personal – There’s an old adage that goes “People don’t leave offices or jobs- they leave managers”. A bad manager will end up hurting the company. A manager that is biased and unfair will end up removing any motivation and will damage the company’s prospects of success in the future. Managers often bring their own ego into the equation. Things are often done not because they are the right thing to do but because the manager wants to do them in a particular way. Managers also play favorites and are unfair to hardworking employees they have personal differences with. An AI, on the other hand, will be completely impartial.

Discrimination can be a thing of the past – Another problem is that human managers can be discriminatory. Artificial intelligences will judge people based on how good their work is. They will not care about the gender, religion, race, or nationality of the employee. This will end up in a much more equal society where everyone has an equal chance of success based on how good they are at their job.

Artificial Intelligence can come up with solutions humans cannot – The basic reality which will make human managers redundant is that AIs can come up with solutions we cannot. A great example of this can be found in electronics engineering in a field called Evolvable Hardware. The field works through evolutionary algorithms and makes computers create new iterations of hardware until it comes up with a working solution. In 1996, Dr. Adrian Thompson, a prominent researcher of the field, was trying to come up with a better circuit design for a task. According to his expertise, the task could be completed by using around a hundred logic gates on the circuit. It took him more than 4,000 iterations to reach a design that did what he did.

Satisfied, he proceeded to inspect the circuit that had been made. He was astonished to see that only 40 logic gates were being used. Even worse was the fact that he had no idea how the circuit was working. According to the theories and processes of electrical engineering he knew (and he knew a lot), the circuit shouldn’t have worked. There were 5 logic gates in the circuit which were not connected to the rest of the process going on in the circuit, yet disabling any one of them made the device stop working.

After a lot of research, he finally figured out what the circuit was doing. He was trying to understand it through basic logic previously; that circuits work through 1s and 0s activated by electricity. The emergent design which had come from the evolutionary algorithm went further. Instead of just using the electricity to make things go 1 or 0 (or ON and OFF as they are more commonly known), it was also taking into account the magnetic flux being generated by the passing of the electricity in the circuit. Instead of just operating on ON and OFF, the system was using magnetic fields, which were considered a useless side effect by most engineers, in the process to do the same task more efficiently.

Imagine the same level of thinking working on our business processes. What new solutions will it find? The AI may come up with solutions which will be better than the ones we come up with but we still will not understand how. We may simply marvel at the business processes designed by an AI and note that output has increased.

Why AI makes people uncomfortable

This is terrifying in many ways for us. Human beings are used to be the smartest things around. We have changed and used the world in any way we want, displacing animals and treating them like minor annoyances, because we are smarter than the other animals. A dog or a monkey cannot understand how a car or a computer works no matter how much it tries. It can observe its actions and may even be trained to push a few buttons to get a treat, but understanding the underlying mechanism is impossible. AI as management will turn us into the animal looking at things working and never being able to understand how.

Why AI will change the world for the better

All that we have said so far may make it seem like AI is a bad thing because it replaces humans from more jobs. We are incredibly excited about AI because the doom and gloom scenario isn’t the most possible one. There are other far more tangible possibilities and they promise amazing things for humanity in the future. AI will let us overcome the biggest problems in the world without the usual roadblocks. Today it has already been introduced to the general public in various useful AI applications and devices, and goes on its victorious march further.

AI may be the death of capitalism

The world works on capitalism these days. The funny thing is that even most supporters of capitalism agree that there are some fundamental flaws in the system. The world works on capitalism not because it is the fairest system but because it is the best system we have come up with yet. Why are some people so much richer than the rest of us? They own the capital to invest and start companies. Why can we not simply have the public own the factories and companies? Every time we have tried to do so it has resulted in massive inefficiencies and corruption. If you give people who do not have a personal incentive to make something work, they will not do their work properly. This is just how human beings are wired. In a state controlled economy the companies and factories are controlled by people appointed by the government. These people know that their promotions and pay increases are linked not to the performance of the factory under them but on how much they appease their leaders.

Having AI as upper management would solve this problem. We need capitalism because we need someone to lead the company. We need someone to manage everything and tell people what to do. If we have AI that can do the job then we will no longer need factories or offices to be owned by people. We can have companies that are totally owned by employees – everyone getting a fair share of the profits. There will be no problem with leadership because an AI will be making all the business decisions. AI allows us to think beyond capitalism.

That is the future of the world of business. A world where most tasks will be done automatically and ownership of materials may become meaningless. Imagine how much an AI will be able to do for humanity. We will make new strides in medical science, space travel, and a thousand other industries not because some person was looking for a profit, but because an AI will be using the available resources at 100% efficiency.

All this is talk of a distant future. It may take us 50 years to get there, it may take us a 100, or we may end up accidentally creating AIs earlier and reach the point in 25 years. We aren’t sure about how the future will look like and perform but we are sure that it will be beyond our wildest imaginations. In the last 100 years we have gone from basic tools to space ships and satellites. AI will help us unlock the next chapter of humanity and businesses. Right now the race is on to create the first AI that can help businesses because the first company to do so will earn a lot of money. In the future AIs themselves may be tasked with creating other AIs, automating the whole process.

We have only seen the first ray of AI yet. Who knows what will happen when the AI’s sun rises completely.

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