the economics of machine intelligence

Machine intelligence is a prediction technology. Technological revolutions tend to involve activity that becomes cheap like the cost of communication or finding information.

Finding information means more search. More search means more data. Data means more research. Research for the research.

That’s fine….. really.

The economic shift will center around a drop in the cost of prediction.

Machine intelligence will lower the cost of goods and services. Prediction is an INPUT to a host of activities including transportation, agriculture, healthcare, energy manufacturing, and retail.


Human judgment is important… still


When the cost of input falls we will perform more tasks using prediction. Machine intelligence lowers the cost of prediction. As the cost of prediction falls, inventory management and demand forecasting will take on new dimensions. The data becomes INPUT DATA.

Factories and warehouses have used autonomous driving. They are controlled environments where prediction technology “made” input for the driving software. Predictions change and that leads to software updates. Updating the software is less expensive. The predictions in the workplace allow for better productivity.

Artificial Intelligence (AI) is asked to predict. Since the vehicles are outfitted with sensors and collects data for input, the AI learns to predict what directions to take to get products from point A to point B. Prediction is a major component as a result and brings solutions to solve problems.

As machine intelligence improves, the value of human prediction skills will decrease because machine prediction will offer a cheaper substitute. This is not a negative for human jobs. Human value judgment will increase. Judgment is a complement to prediction.

When the cost of prediction falls demand for judgment rises. More research is a result of more data. More data will lead to more judgment. As a result, employees will know more skills from the predictive analysis. This relieves stress in the workplace and increases productivity.

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Source: (November 2016) The Simple Economics of Machine Intelligence


Published by mikebertelsen

Global market, trade, and financial news. I keep up to date with what I assess is important.

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