Business Standard

What algorithms can do


The 20th century economy revolved around big corporatio­ns. Then the World Wide Web and the digital economy led to the emergence of an economy of individual­s with vastly expanded reach and earning power in the early 21st century. The world has now transition­ed to an economy of algorithms backed by the advent of artificial intelligen­ce (AI) and blazing fast networks.

This book is a speculativ­e look at where this new economy could’s written by an academic of polish origin, who did a st int in silicon valley before moving to Australia without losing touch with either the eu or the us. the peripateti­c background is worth a mention since it slots into the assert ions about the global reach that’ s a direct result of the economy of algorithms.

For there st, the book correctly asks more questions than it can answer, and it offers a wealth of entertaini­ng examples of what algorithms can do. as the author says, it is very difficult to assess the likely long-term effect of technologi­cal change, so it’s sensible to speculate. He offers nine rules to handle this new economy but beyond the exhortatio­n to“stay curious ”, the other rules could be mu table.

Here are some use-cases (successes and failures) from the book. In the depths of winter, in rural Georgia (USA), a lone jogger had a fall and ended up unconsciou­s. His Apple Watch contacted 911 with a phone call, “The owner of this device needs assistance”, and gave exact GPS coordinate­s. This enabled emergency services to reach the man before he died of exposure. In 2020, the author attempted to buy Covid masks online and discovered these seemed to go out of stock in the mere seconds between his placing an order and making payment. Similar things happen with sought-after Playstatio­ns, fancy sneakers, and even hotel and airline reservatio­ns.

This is because many people use algorithms simultaneo­usly to shop for these things. hence, the thought that b2c has been replace db yb 2 a 2 cw here a stands for algorithms. some al gos are even programmed to hand back to a human if an “i’ m not a robot” verificati­on pop sup, and then to take back control once the human has done the cap tc ha.

Well over 50 percent of the world’ s financial trading is done by algos — and many are autonomous. the new york Stock exchange was testing a new messaging system. an absurd test message (“google buys apple !”) was flashed by accident on traders’ screens and deleted within seconds. by then, al gos had already traded several million worth of apple stock.

As smart fridge sand smart car set al become common, grocery buying and vehicle re fuel ling is done, or prompted by al gos, and these too are autonomous, or semi-autonomous. Electric cars map out routes with scheduled stops at charging stations; fridges or dereggs and bacon online. Some at ms are programmed to flash locations of nearby hotels and ca fe si fan overseas debit card is inserted, on the assumption the user maybe a tourist.

What happens if the “shopping al go” of the fridge is programmed to only buy stuff from a specific brand, or specific online shop? both amazon and google have been fined for using algorithms that steered consumers towards the company’ s own products and services. how do you advertise to a smart fridge anyway if it’ s making the choices about the brand of butter? in 2020, co vi d-st rick enuk saw massive protests by school-goers. due to an inability to hold school-leaving exams, Britain’s Office of Qualificat­ions & Exam Regulation­s used an algo to grade students. This grade was, of course, crucial for college admission. The algo had a problem: It ensured the average grade for a given school would be the same as the 2019 average grade for that school!

In another incident, a software engineer was sacked for auto mating his work process, and playing games, while the al gos did his work. it took six years and many positive job reviews before his company discovered this. as the author says, he should have been promoted! an employee in the it department of a hotel chain did exactly the same thing and was promoted for saving millions.

There are many remote-workers who use time-saving “digital minions”, as the author calls such algos, to hold down what might seem like several full-time jobs. In even more creative ways, people have used CHATGPT to generate startup ideas with prompts like “Find a new way to get a return on $100,000.”

A Swedish Youtuber has an audience of over 100 million — 10x her nation’s population. That is algorithmi­c reach for you. The marginal cost of acquiring new customers at scale may drop to zero if the right algo is deployed. Amazon, Facebook and Google are, of course, examples of corporatio­ns that have exploited this at gigantic scales.

This is an entertaini­ng, thought provoking book and it’ s well-written. as a first-time author, marekk ow al kiewicz used anal go. he read acknowledg­ments on books he liked, to deduce what successful authors did, and to craft a personalis­ed writing process. it’s worked!

 ?? ?? The Economy of Algorithms: AI and the rise of digital minions Author: Marek Kowalkiewi­cz
Publisher: Simon &
Schuster Pages: 294 Price: ~499
The Economy of Algorithms: AI and the rise of digital minions Author: Marek Kowalkiewi­cz Publisher: Simon & Schuster Pages: 294 Price: ~499
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