The Decade of AI?

With the dawn of a new decade there is always speculation as to what influences will define that decade. Some may argue that the 2010s was the decade of data and social media. What will define the socio-cultural zeitgeist of the 2020s that in turn will be measured by its global impact? Will it be AI?

There is a temptation to evoke the 20s imagery from the previous century with its carefree, colorful, hedonistic tones to weave into our contemporary narrative for what the 2020s may hold, but then again, the glaring economic downfall that swallowed their roar, would serve to temper any desire for history to repeat itself for those of us involved in the world of finance.

Gathering Storm

There are serious issues to be considered as we begin this new decade. The wealth disparity globally is at levels unseen in the industrial era, to give context, wealth disparity in the US for example, is higher than the levels of prerevolutionary Russia or pre-WWI western European nations. This is vaguely being expressed in a ferment of societal discontent across the world. The wealth disparity could be thought of as the overall drought conditions which require only a small spark to ignite a fire. Take, for example, Chile’s recent eruption, which ostensibly was triggered by a 30 Chilean peso (4 US cents) increase in Santiago subway fares.

Between Two Stools

Within this economic inequality, technology finds itself awkwardly straddling the divide. Technology has established the elitism that has fueled the disparity and is simultaneously responsible for the democratization of Information.

Devaluation of Knowledge

Much discussion has taken place on the potential problems of fully automated production. The consequences of the deprecation of manual labor has meant that globally there are less blue-collar jobs to go around. Thus, the desire to retain these jobs nationally has influenced the reaction against globalization, subtly contributing one of the stimuli for trade wars. The search for new solutions has included exploring experiments in basic universal income in places as far afield as Kenya and Switzerland. The issue of baseline livelihood is now rising to the debate stage of US presidential hopefuls.

A less discussed issue however is the redefinition of our valuation of knowledge. Smart phone in hand, anything that would have once been prized as knowledge (or perhaps more correctly priced as knowledge) can be instantly accessed. Its net worth is diminished.

The mid-to-late twentieth century shift to a knowledge economy (of which the tech industry is a fruit) rooted its value in the pricing of knowledge and its associated skill sets, seeding the rapidly increasing valuation of the intellectual sphere. This in turn has birthed the education industry to streamline and channel to fit the need for the higher valued forms of knowledge. Like all processes of over-honing, the inbreeding of specialization of specializations has left the knowledge economy vulnerable to its own weaknesses. The tech industry, one of its spawn, has begun to sprout autophagous characteristics.

White-Collar Graveyard?

For those who fear it, what might an AI future look like in the coming decade? Let’s begin by ignoring the fanciful AI Armageddon scenarios (of which there are plenty), but consider a more dull outlook. Mundane considerations are perhaps more threatening to many.

The ‘removal of back-office inefficiencies’ is a more palatable term for human redundancy. AI—as a technology—has the ability to replicate many routine intellectual tasks and skills. As the technology itself develops, this can be expected to continue to improve. An unfortunate by-product of this advancement is that where these tasks are specific and curtailed, it will do them better than a human equivalent and thus will inevitably lead to human unemployment. Much of what in the economic context is considered intellectual activity is actually a mix of literacy, ordering and repetition. These features are the domain of the white-collar worker, who is now increasing being trimmed by technological advances.

Addressing the Future

We can presume that disquieting questions of wealth, inclusion, disenfranchisement and meaningful existence will not evaporate over the forthcoming decade. These are issues that have to be tackled.

For ideas of social capital and human well-being to become more relevant, to ensure there is a genuine broad advance for humanity that parallels technological advances, it will be crucial that there is the finance available to underpin its development.

We are of the opinion that the advances in AI can be used to address this, specifically in relation to the financial world. Considering that new approaches will have to be developed to deal with a shift in labor markets, these approaches will require innovative models to generate the finance needed for the betterment of society. Investment and the protection and growth of capital to meet these needs, as they change, requires better management. AI technology can act in the asset management space as a benign force to help adapt to a changing future. ■

Image Credit: Deagreez at Can Stock Photo Inc.