Adding ‘Real' Value

AI can enormously increase the degree of predictability in organisational functions, especially HR.

- Ajay Agrawal, Joshua Gans, And Avi Goldfarb

When Steve Jobs paced the stage in January 2007 introducing the world to his latest creation, the iPhone, not a single observer reacted by saying, “Well, it’s curtains for the taxi industry!” Fast forward to 2018 and that appears to be precisely the case. Smartphones evolved from a music-browsing-communication device to an indispensable platform for tools that are fundamentally altering all manner of industries.

Even Andy Grove, who famously quipped that “only the paranoid survive” would have to admit that one would have had to have been unusually paranoid to have foreseen how far and wide the smartphone would reach into so many well-established industries.

Recent developments in artificial intelligence (AI) and machine learning have convinced us that this innovation is on a par with the great, transformative technologies of the past: electricity, cars, plastics, the microchip, and the smartphone. But, as with these past transformations, it is critical to identify just what is at the heart of this new technology. Despite media and popular culture images of human-like robots and superintelligent computers, the core of recent developments in machine intelligence is something seemingly more pedestrian: a major advance in the ability of machines to predict. Prediction is the process of using the information you have to generate information you do not have. We use this new information to make decisions, both ordinary and critical. And, the prediction is about to get even better, faster, and cheaper than it ever was.

You may not realize it, but the prediction is everywhere. Bankers predict when they assess who will pay back a loan. Doctors predict when they diagnose a disease. Translators predict when they move from one language to another. Every time you make a decision under uncertainty, you make a prediction. Better, faster, and cheaper prediction means more effective decision-making. This will be transformative.