The Simple Economics of Machine Intelligence

Harvard Business Review

The year 1995 was heralded as the beginning of the “New Economy.” Digital communication was set to upend markets and change everything. But economists by and large didn’t buy into the hype. It wasn’t that we didn’t recognize that something changed. It was that we recognized that the old economics lens remained useful for looking at the changes taking place.  ...

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How AI will change strategy: a thought experiment

Harvard Business Review

How will AI change strategy? That’s the single most common question the three of us are asked from corporate executives, and it’s not trivial to answer. AI is fundamentally a prediction technology. As advances in AI make prediction cheaper, economic theory dictates that we’ll use prediction more frequently and widely, and the value of complements to prediction – like human judgment – will rise. But what does all this mean for strategy? ...

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It doesn’t take a tremendous amount of training to begin a job as a cashier at McDonald’s. Even on their first day, most new cashiers are good enough. And they improve as they serve more customers. Although a new cashier may be slower and make more mistakes than their experienced peers, society generally accepts that they will learn from experience. ...

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The trade-off every AI company will face

Harvard Business Review


How AI will change the way we make decisions

Harvard Business Review

With the recent explosion in AI, there has been the understandable concern about its potential impact on human work. Plenty of people have tried to predict which industries and jobs will be most affected, and which skills will be most in demand. (Should you learn to code? Or will AI replace coders too?)

Rather than trying to predict specifics, we suggest an alternative approach. Economic theory suggests that AI will substantially raise the value of human judgment. People who display good judgment will become more valuable, not less. But to understand what good judgment entails and why it will become more valuable, we have to be precise about what we mean. ...

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What to expect from Artificial Intelligence

Sloan Management Review

To understand how advances in artificial intelligence are likely to change the workplace — and the work of managers — you need to know where AI delivers the most value. ...

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On October 12, 2016, President Obama’s Executive Office published two reports that laid out its plans for the future of artificial intelligence (AI). The reports received less media attention than they might have otherwise because the United States was gripped by the final weeks of a presidential campaign race. But depending on one’s view of AI’s potential impact, the work described by these reports may be more influential on the long arc of history than the outcome of that election. Combined, the two reports include eighty-eight pages and twenty-five recommendations. Here are the highlights.

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The US AI Policy Roadmap

Harvard Business Review