Sunday, March 26, 2017

On Artificial Intelligence and Job Losses

  • Last week, U.S. Treasury Secretary Steven Mnuchin said “In terms of artificial intelligence taking over American jobs, I think we’re like so far away from that, not even on my radar screen … I think it’s 50 or 100 more years [away] … It’s taken jobs that are low-paying … We need to make sure we are investing in education and training for the American worker.
  • Separately, the White House report “Artificial Intelligence, Automation, and the Economy” from Dec. 20, 2016 said “Advances in Artificial Intelligence (AI) technology and related fields have opened up new markets and new opportunities for progress in critical areas such as health, education, energy, economic inclusion, social welfare, and the environment. In recent years, machines have surpassed humans in the performance of certain tasks related to intelligence, such as aspects of image recognition. Experts forecast that rapid progress in the field of specialized artificial intelligence will continue. Although it is unlikely that machines will exhibit broadly-applicable intelligence comparable to or exceeding that of humans in the next 20 years, it is to be expected that machines will continue to reach and exceed human performance on more and more tasks … AI-driven automation will continue to create wealth and expand the American economy in the coming years, but, while many will benefit, that growth will not be costless and will be accompanied by changes in the skills that workers need to succeed in the economy, and structural changes in the economy. Aggressive policy action will be needed to help Americans who are disadvantaged by these changes and to ensure that the enormous benefits of AI and automation are developed by and available to all.”
  • Also, the Pew Recent Center report “Public Predictions for the Future of Workforce Automation” March 10, 2016 said “Two-thirds of Americans expect that robots and computers will do much of the work currently done by humans within 50 years … but most workers expect their own jobs or professions will still exist in their current form in five decades”

MY TAKE
  • Regarding Mnuchin view -  Many studies suggest that blue and white collar tasks are  being replaced by AI and automation more rapidly than Mnuchin’s expectations.
  • Regarding investing in education and training – With the rapid pace of technological inovation, policymakers face the challenge of determining what type of education and training should be funded to address the structural changes taking place in the job market.  

Sunday, March 19, 2017

On Autonomous Vehicles in California and More

  • On March 10, the California Department of Motor Vehicles (DMV) proposed new regulations for testing and deploying autonomous vehicles that would allow the vehicles to drive on the road without human presence and DMV spokesperson Artemio Armenta said “We have received numerous comments from companies, consumer advocates, local government and stakeholders to promote innovation and address public safety … this is a rule-making process, so the next step is making sure we get this completely right.”
  • Dan Gage, spokesman for the Alliance of Automobile Manufacturers said, “With federal statistics confirming that 94 % of all crashes involve driver error, getting more of these new technologies on our roads will help keep drivers safer, while also helping to avoid traffic congestion, reduce fuel use and save time and money,”
  • John M. Simpson, director of the Consumer Watchdog's Privacy Project said "The DMV's current self-driving car test regulations set a standard for the nation, requiring a test driver behind a steering wheel who could take over, and vital public reports about testing activities … The new rules are too industry friendly and don't adequately protect consumers … DMV needs to rein in Uber CEO Travis Kalanick and his renegade operations … Explicit truck testing rules are required immediately." 
  • Brian Soublet, DMV deputy director and chief counsel said “Both highway patrol and local areas need to know how to interact with the vehicles, and we’ve put out what we think are minimum standards … They need to understand how to know if the autonomous technology is engaged, how to pull it off the road, and some of the important things [such as] where to find in the vehicle who owns it and who is insuring it.” 
  • Separately, a recent AAA survey of over 1,000 Americans revealed that: 1) 78% are afraid to ride in a self-driving vehicle, 2) 54% do not want a self-driving vehicle near them while they are on road, but 3) 60% are interested in vehicles with autonomous features, such as automatic braking and self-parking

MY TAKE

  • Recent tests of autonomous vehicles suggest that progress is being made, but safety issues continue to be encountered.
  • In addition, as Brian Soublet has highlighted, there are many dynamics  to address beyond the technology to enable the transition.  
  • Regarding consumer views - autonomous vehicles will improve over time and consumers will be more receptive as they increasingly experience the benefits of this class of technology.

Sunday, March 12, 2017

On Blockchains and Innovation in Digital Commerce

  • Last week the Harvard Business Review article “The Blockchain Will Do to the Financial System What the Internet Did to Media” said “The “killer app” for the early internet was email; it’s what drove adoption and strengthened the network. Bitcoin is the killer app for the blockchain. Bitcoin drives adoption of its underlying blockchain, and its strong technical community and robust code review process make it the most secure and reliable of the various blockchains. Like email, it’s likely that some form of Bitcoin will persist. But the blockchain will also support a variety of other applications, including smart contracts, asset registries, and many new types of transactions that will go beyond financial and legal uses … 
  • Unfortunately, the exuberance of fintech investors is way ahead of the development of the technology. We’re often seeing so-called blockchains that are not really innovative, but instead are merely databases, which have existed for decades, calling themselves blockchains to jump on the buzzword bandwagon … 
  • However, it is likely that, just as Linux is now embedded in almost every kind of commercial application or service, many of the ultimate use cases of the blockchain could become standard fare for established players like large companies, governments, and central banks”.
  • Separately, a blog post at Google’s AI focused health tech subsidiary, DeepMind said ”Imagine a service that could give mathematical assurance about what is happening with each individual piece of personal data, without possibility of falsification or omission. Imagine the ability for the inner workings of that system to be checked in real-time, to ensure that data is only being used as it should be. Imagine that the infrastructure powering this was freely available as open source, so any organization in the world could implement their own version if they wanted to … 
  • Over the course of this year we'll be starting to build out Verifiable Data Audit for DeepMind Health, our effort to provide the health service with technology that can help clinicians predict, diagnose and prevent serious illnesses – a key part of DeepMind’s mission to deploy technology for social benefit …
  • The ledger and the entries within it will share some of the properties of blockchain, which is the idea behind Bitcoin and other projects.”
MY TAKE 
  • Blockchain style solutions may be as transformational to global commerce as the World Wide Web’s Hypertext Transfer Protocol (HTTP) and Hypertext Markup Language (HTML), which changed the process of digital content creation and distribution.
  • These approaches will likely support programmable services and enhance our view of what digital assets are and how they will be used.
  • However, success will require 1) executing transactions in a secure and timely fashion, 2) providing services that are easy to use, 3) adapting to a growing community of users, 4) addressing cyber-crime and 5) confronting competition from incumbent players.



Sunday, March 5, 2017

On Uber's Bad Behavior

  • Responding to statements about sexual harassment from a former Uber engineer (Feb. 19), CEO Travis Kalanick said “I have just read Susan Fowler’s blog. What she describes is abhorrent and against everything Uber stands for and believes in. It’s the first time this has come to my attention so I have instructed Liane Hornsey, our new Chief Human Resources Officer, to conduct an urgent investigation into these allegations. We seek to make Uber a just workplace and there can be absolutely no place for this kind of behavior at Uber — and anyone who behaves this way or thinks this is OK will be fired.” 
  • Responding to a video by an Uber driver (posted Feb. 28), Kalanick said “By now I’m sure you’ve seen the video where I treated an Uber driver disrespectfully. To say that I am ashamed is an extreme understatement. My job as your leader is to lead…and that starts with behaving in a way that makes us all proud. That is not what I did, and it cannot be explained away … It’s clear this video is a reflection of me—and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it … I want to profoundly apologize to Fawzi, as well as the driver and rider community, and to the Uber team.” 
  • Responding to a New York Times article (March 3) that said, “Uber has for years engaged in a worldwide program to deceive the authorities in markets where its low-cost ride-hailing service was being resisted by law enforcement or, in some instances, had been outright banned. The program … uses data collected from the Uber app and other techniques to identify and circumvent officials. Uber used these methods to evade the authorities in cities such as Boston, Paris and Las Vegas, and in countries like Australia, China, Italy and South Korea.”, 
  • an Uber statement said “This program denies ride requests to users who are violating our terms of service — whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers.”
  • Notes on Uber: 1) The firm's 2016 revenue was $5.5 billion, with a loss of about $3 billion, 2) it has raised over $11 billion in capital and debt, 3) the company has a valuation of about $65 billion.  

MY TAKE
  • Comments by Uber investors Mitch and Freada Kapor (Feb. 23) are worth considering: “Uber has been here many times before, responding to public exposure of bad behavior by holding an all-hands meeting, apologizing and vowing to change, only to quickly return to aggressive business as usual … Investors in high growth, financially successful companies rarely, if ever, call out inexcusable behavior from founders or C-suite executives.”
  • Note: Mitch Kapor was founder of Lotus Development Corp.