“Wealth is the ability to fully experience life.” ~ Henry David Thoreau
Question: What are your thoughts on how artificial intelligence may impact the economy and society?
Answer: Artificial intelligence (AI) is an innovative advancement that’s changing our world. AI makes predictions based on compilations of loads and loads of relevant data. The goal is to create optimal outcomes for an intended purpose.
The expectation is that AI and its applications will lift economic productivity and improve our quality of life. Some jobs will be lost, but new and often better jobs are created. The new jobs require a more diverse skill set and are in many instances responsible for increasing the standard of living.
Matt Ridley is the author of “The Rational Optimist: How Prosperity Evolves,” which was published in 2010. He states that in 1900 the average American spent $76 out of every $100 on food, clothing and shelter; today that amount has dropped to $37. In 1908 it took about 4,700 hours of work to buy a Model T. Today, approximately 1,200 hours of work at an average wage will buy to buy a car that’s thousands of times better and safer than those 1908 models. Less hours of work for a much improved product is positive advancement.
An IHS Automotive study estimates that by 2035 over 20 percent of all cars on the road will be driverless. Companies designing software, hardware and communication systems for this purpose will likely be in demand. Since the average person spends 90 minutes a day in a car, the impact of this significant change could be powerful. The defense sector is also adopting AI, autonomous vehicles and using drones to increase the safety of their personnel.
Gaming platforms are a rich source of data mining for driverless car and drone makers. Gamers feed experience to AI technology providers with details regarding average reaction time, attention span and fields of vision. These facts are useful by autonomous car makers to perfect their product and create optimal outcomes for safety and convenience.
The technology used to create driverless vehicles and drones is based on data, calculations, and measurements to create algorithms and artificial intelligence from simple games from like the painfully slow PONG video game released in 1972. I remember this because this was my “big” Christmas gift that year.
Today’s augmented reality games combine graphics with the real-world to make PONG look like something from “The Flintstones.” These games ultimately produced applications and advancements affecting transportation, healthcare, communications, utilities, construction and financial services.
Social media platforms such as Facebook provide personal data to advertisers. That’s why I receive pop-up ads for products related to grandchildren, cocker spaniels, and investing. Companies do keep track of our searches and purchasing patterns for future reference. The hope is to create “optimal outcomes” and sales.
Currently, over 3.2 billion people orhalf the world’s population have access to the internet. We pursue bigger, better, faster and more at warp-speed. The internet is used for commerce, work, news, social contacts, shopping, finance and investing, travel reservations and entertainment. How AI is integrated with the internet and rolled out will matter to society, humanity, and of course the economy. For many people, AI is already part of daily life. We have relationships with Siri, Alexa, Watson and Hey Google, which are machines that appear to think and speak.
Robots have been used in agriculture, manufacturing and healthcare for years. The agri-bot market is expected to grow to $16.3 billion by 2020 according to CapitalGroup. Due to a shortage of labor and the trend toward larger farms, AI is taking over along with global positioning systems (GPS) that can measure and direct agri-bots on planting and harvesting. The use of surgical robots and AI are used to help with medical procedures and diagnoses that are constantly improving. By 2022 this market valuation is expected to grow to nearly $38 billion.
Can machines really think or do they just make assumptions based on data? Smartshoes are a new product that are guided by GPS. The shoes respond with haptic (vibratory) feedback guiding you to your destination as instructed by an app. These vibrations tell your feet where and when to turn and will alert you to points of interest based on your known preferences from the internet. Bluetooth syncs the shoes with Google Maps and also is a fitness tracker. The question is, are smart shoes thinking or merely reacting?
Albert Einstein said, “The only source of knowledge is experience.” But do knowledge and experience equal wisdom? That’s a deep philosophical question for another day and a reason to go slowly into the future. Closing the education gap to fill these new job opportunities with contemporary skills will be an important element of the successful transition into artificial intelligence. It’s clear that AI is and will continue to be a powerful influence in our lives and the investment world. Stay focused and plan accordingly.
This information is general in nature and is not a recommendation of any particular strategy. The opinions expressed are those of the writer, but not necessarily those of Raymond James and Associates, and subject to change at any time.
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This article provided by Darcie Guerin, CFP®, Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email darcie. firstname.lastname@example.org. Website: www.raymondjames.com/Darcie.