Monday, May 29, 2017

On the Impact of Automation (Mark Zuckerberg, Best Buy, retailers and more)

  • Last week Mark Zuckerberg, during his Harvard University commencement speech, said, “Our generation will have to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks. But we have the potential to do so much more together. Every generation has its defining works. More than 300,000 people worked to put a man on the moon – including that janitor. Millions of volunteers immunized children around the world against polio. Millions of more people built the Hoover dam and other great projects. These projects didn't just provide purpose for the people doing those jobs, they gave our whole country a sense of pride that we could do great things.” 
  • Also, the report “Retail Automation: Stranded Workers? Opportunities and risks for labor and automation” by the Investor Responsibility Research Center Institute said “The impact of significant reductions in retail workers may mirror the impact of manufacturing job losses. Retail sales at brick-and-mortar stores … are increasingly constrained as consumers shift to online shopping. At the same time, many parts of the country are experiencing upward structural wage pressure as concerns about income inequality are gaining political traction. Major retailers, including Macy’s, J.C. Penney, Kohl’s and WalMart, have collectively closed hundreds of stores over the last few years in attempts to stem losses from unprofitable stores. These headwinds are pushing retailers to rethink the traditional retail business model … this report argues that companies which use technology to support their workers are likely to benefit from long-term productivity gains. However, technology also has the potential to automate part of the sales process and render a range of jobs redundant. Taken together, store closures and automation technology have the potential to accelerate job losses in retail, an industry that employs approximately 10% of the total US labor force.”
  • During its quarterly investor conference call, Best Buy Chief Financial Officer Corie Barry said, "We believe there’s real opportunity to take waste out of the system through automation and there are places like our supply chain, there are places like some of our call centers, where we believe we have real opportunities to become more automated.”
MY TAKE
  • While workplace automation is part of the pursuit of "faster/better/cheaper" solutions, current advances in robotics, artificial intelligence, etc may increae the pace of worker displacement.
  • Issues for technology, business and community leaders to address include 1) how will worker adaptation will be managed and 2) how broadly will economic benefits be distributed.    

Sunday, May 21, 2017

On AI, Machine Learning, VR, Robotics and the Cloud (JP Morgan, Google, OpenAI)

  • Last week, JP Morgan released “Big Data and AI Strategies: Machine Learning and Alternative Data Approach to Investing”, a report which said “over the past year, the exponential increase of the amount and types of data available to investors prompted some to completely change their business strategy and adopt a ‘Big Data’ investment framework. Other investors may be unsure on how to assess the relevance of Big Data and Machine Learning, how much to invest in it, and many are still paralyzed in the face of what is also called the ‘Fourth Industrial Revolution … As more investors adopt alternative datasets, the market will start reacting faster and will increasingly anticipate traditional or ‘old’ data sources (e.g. quarterly corporate earnings, low frequency macroeconomic data, etc.). This gives an edge to quant managers and those willing to adopt and learn about new datasets and methods. … Regardless of the timeline and shape of the eventual investment landscape, we believe that analysts, portfolio managers, traders and CIOs will eventually have to become familiar with Big Data and Machine Learning approaches to investing. This applies to both fundamental and quantitative investors, and is true across asset classes.”
  • Also, the non-profit AI research group, OpenAI, said in the note Robots that Learn We’ve created a robotics system, trained entirely in simulation and deployed on a physical robot, which can learn a new task after seeing it done once. Now, we’ve developed and deployed a new algorithm, one-shot imitation learning, allowing a human to communicate how to do a new task by performing it in [virtual reality]. Given a single demonstration, the robot is able to solve the same task from an arbitrary starting configuration.
  • Note: OpenAI’s backers include include Sam AltmanGreg BrockmanElon MuskReid HoffmanJessica LivingstonPeter ThielAmazon Web ServicesInfosysYC Research and Microsoft.
  • Finally, during its developer conference, Google announced that “Researchers require enormous computational resources to train the machine learning (ML) models that have delivered recent breakthroughs in medical imagingneural machine translationgame playing, and many other domains. We believe that significantly larger amounts of computation will make it possible for researchers to invent new types of ML models that will be even more accurate and useful.  To accelerate the pace of open machine-learning research, we are introducing the TensorFlow Research Cloud ... to support a broad range of computationally-intensive research projects that might not be possible otherwise."

MY TAKE
  • Regarding JP Morgan’s comments  – As technology continues to reshape the financial services industry, it is worth revisiting a famous quote by Walter Wriston (CEO of Citibank / Citicorp from 1967 to 1984): “Information about money has become almost as important as money itself”.
  • Regarding Robots that Learn – this example of the integration of AI, virtual reality and robotics illustrates the future direction of product prototyping and design.
  • Regarding Google’s TensorFlow cloud – the battle for mind-share among software developers and researchers will require significant investments by firms including AmazonMicrosoft, FacebookApple and IBM

Sunday, May 14, 2017

"Nearly All Information, Communications Networks and Systems will be at Risk for Years"

  • Last Friday, U.S. Director of National Intelligence Daniel Coat’s comments to the Senate Committee on Intelligence included “Our adversaries are becoming more adept at using cyberspace to threaten our interests and advance their own, and despite improving cyber defenses, nearly all information, communication networks, and systems will be at risk for years … Cyber threats are already challenging public trust and confidence in global institutions, governance, and norms, while imposing costs on the US and global economies. Cyber threats also pose an increasing risk to public health, safety, and prosperity as cyber technologies are integrated with critical infrastructure in key sectors. These threats are amplified by our ongoing delegation of decisionmaking, sensing, and authentication roles to potentially vulnerable automated systems. This delegation increases the likely physical, economic, and psychological consequences of cyber attack and exploitation events when they do occur. Many countries view cyber capabilities as a viable tool for projecting their influence and will continue developing cyber capabilities. Some adversaries also remain undeterred from conducting reconnaissance, espionage, influence, and even attacks in cyberspace.”
  • In addition to potential threats from RussiaChinaIranNorth Korea and terrorist organizations, Coats noted that "Criminals are also developing and using sophisticated cyber tools for a variety of purposes including theft, extortion, and facilitation of other criminal activities. “Ransomware,” malware that employs deception and encryption to block users from accessing their own data, has become a particularly popular tool of extortion. In 2016, criminals employing ransomware turned their focus to the medical sector, disrupting patient care and undermining public confidence in some medical institutions.  
  • On Friday, the U.S Department of Homeland Security said it was “aware of reports of ransomware known as WannaCry affecting multiple global entities. Ransomware is a type of malicious software that infects a computer and restricts users’ access to it until a ransom is paid to unlock it.  Microsoft released a patch in March that addresses this specific vulnerability, and installing this patch will help secure your systems from the threat ...  we encourage all Americans to update your operating systems and implement vigorous cybersecurity practices at home, work, and school.” 
  • Also, Senator Ben Sasse, a member of the Senate Armed Services Committee said "This is big: around the world, doctors and nurses are scrambling to treat patients without their digital records or prescription dosages, ambulances are being rerouted, and millions of people's data is potentially exposed. Cybersecurity isn't a hypothetical problem – today shows it can be life or death. We'll likely look back at this as a watershed moment."
  • Note: Reports suggest that over 125,000 computers in +100 countries were impacted by the WannaCry ransomware last week, which included over twenty British hospitalsFedExRenault, Nissan, Telefonic,and Deutsche Bahn.  
MY TAKE
  • As technology firms introduce new operating systems, applications and distributed solutions,  the slow pace of customer adoption along with reduced support for "legacy" systems creates security risks. For example, Microsoft stopped providing security updates for it Windows XP operating systems on April 8, 2014. However, in the case of WannaCry, Microsoft took an "highly unusual" step and provided patches for Windows XP, Windows 8, and Windows Server 2003
  • Minimizing the impact of cyber-attacks will continue to require many approaches including 1) installing security patches and software updates, 2) avoiding links and attached files in unfamiliar emails, 3) backing up data, 4) using encrypted services and 5) incorporating data security into the design of new technology solutions.