Category: Institutions and Revolutions

How Data Privacy Issues Are Mutiplied by the Internet of Things

Data is at the core of the business model of the internet. Our private, personal data actually. And, as Cory Doctorow writes in one of his usual well-researched rants, ‘The Privacy Wars Are About to Get a Whole Lot Worse‘. The reason is the emergence of the Internet of Things.

billboard-spyingThe Internet of Things (IoT) started already with the smartphones. Because we will progressively be surrounded with sensors that will measure many things and even listen to what is being said or done, our privacy will be even more exposed than now.

“The returns from data-acquisition have been de­clining for years. […] Diminishing returns can be masked by more aggressive collection. If Facebook can’t figure out how to justify its ad ratecard based on the data it knows about you, it can just plot ways to find out a lot more about you and buoy up that price.”

We probably underestimate already the license we give to our smartphone and its apps to use various channels of data recovery. As Cory Doctorow underlines, no-one really bothers to read the long license agreements, and anyway what can you do if you disagree? We can’t go negotiate one particular section with Google or Facebook, can we?

Cory Doctorow’s point is that one day, on some particular issue, a judge may grant significant compensation because of the indirect usage of personal data. However this day is far away. AT the same time this privacy issue is currently slowing down the spread of IoT and its convenience. A solution must be found.

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How the Clustering of Knowledge Disrupts Our Institutions

In a well quoted Medium post ‘The Most Disruptive Transformation in History‘, Richard Florida makes the point that “the clustering of knowledge over physical labor? is among the most disruptive in recorded history“.

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Is there light only where there is knowledge?

His analysis is mostly focused on the clear demarcation between rural and city votes and feel during the last US presidential elections. He interprets is as a geographical clustering of knowledge in cities and makes the point that power should be given back to the cities that would be the new driving political forces of the Collaborative Age.

I do not fully agree with this analysis of geographical clustering because it remains to be shown that knowledge concentrates geographically. There are strong diverging forces also at play, including internet access from anywhere and a certain trend at least in some countries for knowledge workers to work remotely and move back to the countryside.

At the same time, there is clearly clustering of knowledge among only a small part of the community, and at least in the virtual space. And this still does challenge our current institutions.

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How to Replace the Industrial Age Labor Loop?

The Industrial Age has been built by the labor loop: pay workers more so that they can consume more factory products. This has led to unprecedented improvement of living conditions and overall wealth. This also worked well in an era of scarcity.

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Ford announcing doubling of wave to 5$ a day – typical of the Industrial Age labour loop

As we reach an era of abundance, where manufacturing can produce way more than we can or should consume, what will be the new model that will drive progress in the world? There is much talk about replacing it with a knowledge loop. An excellent post describes this transformation: ‘From the Job Loop to the Knowledge Loop (via Universal Basic Income)‘.

At the same time I find that the view of a knowledge loop supported by basic income where everybody would keenly participate to creating knowledge quite utopic. I am not sure everybody would indeed participate actively, and how the contributions of individuals could be valued.

Nevertheless, the crisis of the labor loop is upon us, as shown by the relative decrease of wages as part of wealth creation and we need to find an alternative model.

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Why There Will be Less ‘Jobs’ in the Collaborative Age

Irrespective of whether the amount of work available will change (it might remain quite stable), the number of ‘jobs’ (meant as being an employee) will certainly decrease.

self-employmentSelf-employment is already dramatically on the rise in many countries for a while and it is I believe a trend that will remain.

Platforms that serve to link self-employed people and clients are also on the rise.

Self-employment is not always a choice: it is sometimes the only way to keep some activity and a lot of self-employed people work are forced to work part-time and at weird times too.

At the same time, self employment means more freedom and flexibility, and the possibility to have several concurring activities.

It is strange how the administrative organization of most developed countries are so tweaked to considering people as being employee of some organization. This creates all sorts of complications for the self-employed, or requires to create a company to become an employee of sorts.

The trend to self-employment is here to stay. Our institutions should change to cater for this situation and better protect those who work under this model.

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How to Approach the Question of Job Availability in the Collaborative Age

Will there be more or less jobs in the Collaborative Age? This is a decisive political question at the core of many discussions and votes.

Robot waiters in action
Robot waiters in action

One one hand, there is an impression that robots will take over jobs, in particular those that are do not require high qualifications.  For example, truck drivers represent up to 2.5% of the total workforce in the US and could be soon replaced by robots (to which other types of drivers like taxi etc need to be added, bringing possibly the total to 3.0 or 3.5%). This is a huge, huge number and the shift may happen soon. How will those people redeploy their talent?

Others like Tim O’Reilly in this video titled ‘why we’ll never run out of jobs’ take the stand that the Collaborative Age will provide new opportunities and that work will not be a problem: according to him we’ll never run out of jobs, because:

  • we will never run out of problems
  • there will always be the need for new, attractive products
  • of innovation

That may be true once the transition has been performed.

One thing for sure, jobs in the Collaborative Age will be different than today’s. The skills and talents they will require will be different too.

The conversion of the current generation to the new situation may be painful and this may help explain the tidal waves of conservative fear of change that express themselves at each election.

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How Business Control Shifts to Piloting Support in the Collaborative Age

One of the key transformations from the Industrial Age to the Collaborative Age is related to the function of Business Control.

business controlIn Industrial Age organizations, the control function acts as the police that checks that cost is minimized and employees and resources are used at their maximum productivity. It also covers all sorts of fraud prevention. It is by necessity a function kept independent of operational and line managers, reporting to senior management. Traditionally it is a role that concentrates a large part of the data gathering and analysis capability of the organization.

In Collaborative Age organization, a large part of the control function is evolving into a function that is embedded in the business and supports management decision-making on a day-to-day basis. This is the case for example in project management: project control is embedded in the project and its main role is to support the project manager pilot the project to its objectives. That role is not so much control as organizing the gathering of data, checking for its accuracy, analyzing it and devising appropriate forecasts as to the direction taken by the business.

However, the use of the confusing terminology of ‘project control’ is sometimes misinterpreted. It is not the traditional business control role and must actually be kept separate.

While there will still remain some part of actual business control in the older sense, most of the analytical resources of companies are now devoted to support decision-making, through Business Intelligence and other tools. This evolution will be reinforced into the Collaborative Age. And it is important we don’t keep the terminology ‘control’ to describe that function.

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How the Industrial Age World Wants to Suck Us Back Into Conformism

I am always astonished at how the Industrial Age conformism is trying to pull us back in its wake, in particular for that that have somewhat escaped.

suit-startupI have been on my own as a consultant and entrepreneur for a full 5 years now. In particular since I have come back to France, I have had a lot of comments along the lines of (I simplify): “poor thing scratching your life on your own and having such a difficult life, I hope you’ll manage to get a decent position in a large company soon“. That was in particular a key component of new year’s wishes this year.

Funny how people at the core of the system can only consider success as being successful in the system with all the bells and whistles and external signs of power that go with it. Funny how people consider that being on one’s own is probably so scary and unbearable. Yes, it is probably much less secure, but it is overall so much more fun.

The Industrial Age institutions and corporations are desperate to bring back in their ranks those escapees that live a different life. Let’s resist!

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How New Regulatory Approaches Could Be Structured for AI-Driven Technology

Following up on our post ‘How Artificial Intelligence Challenges Our Regulatory Approach to System Risk‘, in this post let’s discuss some possible new regulatory approaches.

  • ntsbEnhancing lessons learnt and redistributing them to the entire ecosystem is a cornerstone of safety enhancement. It is much facilitated in the case of Artificial Intelligence (AI) thanks to the remote update possibility, as demonstrated successfully by Tesla.
  • Implementing a statistical approach instead of a deterministic one. Some statistical risk analysis approaches are already available for years in the form of fault trees to determine the statistical probability of a feared accident. However this only works in environments where statistical failure data of components is available, and with limited changes to the environment and the system. New statistical approaches will have to be developed based on specific testing of the entire AI-related system. These approaches need to be developed theoretically and empirically and remain the major challenge of the years to come.
  • Rules governing operability of the system in case of component failure will have to be strictly defined and enforced (with how many sensors out of order is it safe to drive autonomously?), because the degraded situations are the most difficult and cumbersome to regulate.

The problem of the new statistical approaches to safety demonstration is an exciting problem facing all regulators. I am looking for some science behind this, if any reader has useful links please share!

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How Artificial Intelligence Challenges Our Regulatory Approach to System Risk

Our current approaches to the regulation of system risk management and prevention of deadly accidents remains very much deterministic. In the most critical applications such as in nuclear power plants or aircraft controls, regulatory authorities require a deterministic demonstration of the links between input and outputs. Superfluous code that is not used needs to be removed, just in case. Older processors are used which reactions are fully known.

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How to test fully HAL’s reactions to all possible events?

With the advances of Artificial Intelligence, this won’t be possible any more. In particular because the devices become black boxes that have learned to behave in a certain manner most of the time when exposed to certain stimulus. However deterministic proof of the relationship between input and output is impossible and we don’t quite know how it really works inside. It can only be a statistical measure.

This situation is an extensive challenge for the regulatory authorities that will have to regulate safety-critical applications based on AI such as automatic driving. Most current regulatory approaches will become obsolete.

Some regulatory authorities have identified this challenge but most have not, although this will constitute a real revolution in regulation.

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Why the Terminator Conundrum Requires Active Anti-proliferation Policies

In this excellent article, ‘the Pentagon’s Terminator Conundrum – robots that could kill on their own‘, the issue now faced by weapons developers is explained clearly.

terminatorWhile the development of drones and robots that could take themselves the decision to engage targets becomes closer, the issue of whether to develop such system becomes a conundrum. It is important to be able to face such a possible threat, at the same time usage of this type of weapon will need to remain very much controlled. Mechanisms similar to control of nuclear proliferation or chemical weapons might need to be put in place – with the particular challenge that no huge and noticeable industrial complex will be needed to produce such weapons.

The Open Letter by concerned scientists on autonomous weapons is interesting to read. It states “If any major military power pushes ahead with AI weapon development, a global arms race is virtually inevitable, and the endpoint of this technological trajectory is obvious: autonomous weapons will become the Kalashnikovs of tomorrow.”

At the same time, military might contend with enhancing human capabilities by teaming humans with robots, in particular to be able to take decisions in uncertain situations. But the issue needs to be tackled quickly because the consequences of robots engaging without control could become a proliferation issue.

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How Combining Human and Artificial Intelligence Might Be the Winning Combination

A lot gets written and debated about Artificial Intelligence these days. In that context, the recent report by the US National Science and Technology Council ‘Preparing for the future of Artificial Intelligence‘ is a must read.

the-future-of-aiOne area that has struck me in particular is the reference to exceptional performance of the combination of human and artificial intelligence when is comes to pattern recognition. An example: “In one recent study, given images of lymph node cells, and asked to determine whether or not the cells contained cancer, an AI-based approach had a 7.5 percent error rate, where a human pathologist had a 3.5 percent error rate; a combined approach, using both AI and human input, lowered the error rate to 0.5 percent, representing an 85 percent reduction in error.”

It seems increasingly that this combination of two different perspectives, ours and the other one we are creating using Artificial Intelligence, could open us new frontiers. Artificial Intelligence in that sense seems rather a useful tool to broaden our perspectives and capabilities.

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How Electronic Services Significantly Change the Service Value Chain

In the banking industry, it is estimated that 80% of the client value (i.e. fees) is still generated by the 5% face-to-face contact. The 95% client contact through internet and mobile does not generate much value. In a context of much lower returns in general for the financial industries, banks are confronted to a key dilemma: increase e-banking and convenience but without losing opportunity for creating revenue!

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Most younger customers never visit bank branches

This is a typical example of the impact of the Fourth Revolution on institutions. Bringing services online is not just a transpose of the actual brick and mortar relationship and value chain. It creates the question of creating a whole new value proposition.

And it so happens as well that if simple transactions can easily be carried over to online interfaces, more complex transactions still require a more in-depth contact, either by phone or face-to-face. In the banking industry those transactions carry the most fees: investments and loans. But keeping branches open create significant fixed costs that see their return diminish. The manner of implementing those interactions in an online world still remains to be invented.

The main lesson for the moment is that by bringing current services and transactions online, believing that the value proposition will remain similar is an illusion. It will change significantly and it will need to be reinvented.

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