What To Do When Machines Do Everything. Roehrig Paul

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world during the past 50 years.

      But there's a catch, which is expressed in the “what to do” part of the title of this book.

      You and the company you work for and represent must accept, embrace, and leverage the fact that, minute by minute, machines are doing more and more of the work we perform today. That is the underlying assumption at the heart of this book.

      This is where many people get stuck. They start tumbling down existential wormholes: Will machines need us? Who will control the machines? Will machines act in the best interests of humanity? Again, these are great questions that prompt fascinating discussions, all of which we like having as much as the next person, particularly with a glass of red wine on hand. But these discussions don't help you know what to do.

      If you want to read about the big philosophical debates about what AI might do in the next 25 years, this is not the book for you. But if you want pragmatic advice on what AI will do in the next five years, then this is definitely the book for you.

      While some have their heads in the sky, others have their noses to the grindstone. While some will ponder, winners will act.

      This book aims to answer questions about the future of your business and your work in an era of intelligent machines. It explains how you as an individual and as a leader in your organization can survive and thrive in a world where machines do everything. This book explains what you should do, why, and what will happen if you don't.

      We wrote this book because we are in an amazing time. Though we are professional students of the future, the three of us are students of history as well. Understanding the great shifts of the past provides a framework for understanding how change happens in the here and now. The rise of machine intelligence is such a moment of great change. Our children and grandchildren will study these times just as we study James Watt, Andrew Carnegie, and Thomas Edison.

      It's time to build our own future, complete with a sense of optimism and confidence. When machines do everything, there will still be a lot for you to do. Let's get on with it.

      1

      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 enjoying – without even really noticing – various forms of “weak” 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 powerful – and disruptive – as 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 games – Jeopardy!, Chess, and Go. Google's AlphaGo beat world champion Go player Lee Sedol by a score of 4–1 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 largely – or exclusively – on 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 “Ubered”?

      • 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 think – what we refer to in these pages as “systems of intelligence.”

      This is leading to what we call the “know-it-all” 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 machines – always “on,” always “learning,” and constantly “thinking” – will 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 machine – this new cocktail of AI, algorithms,

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