Artificial Intelligence and the Economy in the 21st Century

Artificial intelligence is a driving business force in this fast changing 21st century. AI is no longer an implausible futuristic vision, but a stark reality that is disrupting businesses worldwide. In the 21st century, companies are forced to rethink traditional market approaches and become more service – centric in order to remain relevant. Organizations such as Uber and air are perfect examples of 21st century enterprises. The application on the demand, always on technology that propel agility, simplicity, flexibility, and lean operators with customer experience at the core of their actions enabled new dawn of large or small organizations to leverage on the benefits of Artificial intelligence (A1) to succeed in the 21st century. Companies are gradually embracing A1 and its increasingly influence every aspect of business, especially consumer technology.

According to IDC, the worldwide market for cognitive systems, content analytics, and discovery software is expected to accelerate through 2020. As a result, there are speculations regarding AI growing role and whether that might adversely affect the job market.However, the purpose of automation is not to replace humans or dehumanization, but to enhance and augment human functions for improved productivity and efficiency.

The main key benefits of artificial intelligence are stated as follows:

1.Agility from orchestration: by harnessing the power of service integration and Develops, an agile and experience-oriented business, with programmable infrastructure, application releases, and catalog-based services, can be created.

2. Simplicity from autonomics: artificial and predictive analytics will self-healing, self-service, and proactive support, while minimizing waste and establishing elasticity. This will simplify enterprise system workings and enable up-place workforce to handle higher level tasks.

3. Being lean through automation: Automating repetitive tasks will result in waste reduction, workforce optimization, and efficiency point and improvements.

Despite the above disadvantages of AI, it will take several decades before AI will actually be replacing human intelligence. The horror scenarios of AI entities taking over the planet and killing off the human race is still part of science fiction. Although several futurologists predict the possibility of transferring the human mind into a body of a robot to seek immortality in 2050.

The combination of AI and nanotechnology will also make technological breakthroughs in the fields of medicine, energy, and production systems. The combination of AI and nanotechnology applied in solar panels will cause the price of renewable sources of energy to drop dramatically starting in 2025.

The question haunting many is related to the horror scenarios in which killer AI robots start hunting down humans to be killed. These scenarios have been made popular by Hollywood blockbuster movies like the Terminator. Although AI will be beneficial for the human race, it needs to be controlled. Without proper control mechanisms and protocols, AI robots might become hostile although it a highly unlikely scenario. According to Michio Kaku, AI robots will be truly beneficial for the human race. However, in the long term, AI robots must be controlled with various inbuilt mechanisms to prevent them from becoming too independent and autonomous with becoming hostile towards humans as a real possible future scenario.

In Today’s Commercialized World, Money Is Everything – The Rich Can Even Afford To Buy Better Genes

One afternoon, after a grueling math exam, Ayomah’s math teacher, the old and lean Mr. Jacksotto Tobacco, smoking a thin hand-rolled cigarette, sat them together to recount a news story he’d read from a newspaper. It was a heart-warming piece of news. Between puffs on his cigarette, he narrated to the class how, a thirty year-old woman gave birth to a baby free of her family’s curse of Alzheimer’s disease – thanks to the wonders of medical science. To his young mind, it was hard not to feel the joy of the baby’s family, or the hope of the many others who feel helpless by their genetic inheritance.

The breakthrough, according to Mr. Tobacco, occurred when doctors in Chicago, in the US, applied genetic tests to batches of human eggs, helping the woman to have a baby free of her family’s early Alzheimer’s disease. According to him, without such intervention, the baby would have had a 50-50 odds of becoming senile by the time she was 40. But he had a terrible feeling as he thought about the implication of this seemingly wonderful evolution of medical engineering. Before long, the rich will be able to buy not only better education for their kids but also better genes! This thought was especially troubling for someone who didn’t know his father’s whereabouts, and who was being raised by a struggling single parent.

As a child, Ayomah was taught this in school: given a chance between being rich and being smart one should always choose the latter, for smart people will always be able to find a way to get rich and foolish people could easily lose the wealth someone else had worked so hard to accumulate on their behalf. This simple proposition was powerful for those of us growing up with less and whose hopes were derived from the knowledge that if even poor, talented individuals will have a shot in an otherwise unequal world. But after listening to Mr. Tobacco’s story, it turned out that money will buy smarts, too! After the class was over, Ayomah left home thinking that, the prospects for his family, which was already daunting, will, in the future, become almost hopeless. He couldn’t have narrated what he heard from Mr. Tobacco to his Mama. She would be crestfallen.

Ayomah had a great story to tell, he decided to put it in the form of a book. He failed to publish it because he was restricted by money. Later on, he managed to get some money, published the book but yet another challenge – he is unable to advertise it. He is again restricted by money. He thinks of abandoning the whole idea of writing altogether and start a business. Here too, he was restricted by money. He finally decided to go back to school to acquire marketable skills. Hoping that after his graduation he will be able to find a good job. Here too, he was required to first pay some tuition in order to be accepted into that institution. He got restricted again by money.

The Business Model and Today’s Economy – A Warning to Universities and Investors

As spring is upon us, this is the time deans and higher education vice presidents across the land embark on their yearly budget exercise. Given the rosy economic scenario painted by improving wages, job reports and corporate profits, it would not be out-of-place to start dreaming of expanding their own little circles and propose larger budgets and increased hiring for their respective units – what Warren Buffett has dubbed the institutional imperative. My warning: beware!

As an academician, I have often heard high-ranking officials espouse how public universities should be run using a business model. My own university president is a strong proponent of the idea. The problem is that universities are saddled with challenges most companies don’t have to deal with. For example, let us suppose that demand for your company’s product goes down. To keep your company viable and responsible to stockholders you will cut down on production. Fewer sales means less personnel will be needed leading to workforce reductions. Despite lower revenue, the bottom line is kept steady by lowering expenses for materials and personnel.

Let’s look at what happens at a university. Let’s suppose demand for your product, classes, goes down – i.e., fewer students are enrolled. The cost of materials to run a class is minimal as compared to personnel and physical plant costs. You can’t shut down buildings so your only recourse is personnel reductions. Here is a problem corporations don’t have. They never have a case where the few remaining clients demand that the company put out as much product as before the reduction in demand. But if you have a class of 40 reduced to 30 or even 20 students the university cannot cancel it. These students registered for the class well in advance, before the semester even began. Their schedules and even graduation are predicated on it. If the class does not make, students will be in an uproar and in this day and age they have no trouble letting the world know – online. As the news become viral, the university will gain a bad reputation. It will affect future enrollment. Any whisper of lower enrollment sends chills down high administrator’s backs.

Here is another difference between corporations and higher education providers. Corporation hires are more fungible. If you let go someone all you need is several weeks’ notice. Not so for academia. You may let go of staff personnel that way but instructors are on an academic year contract. University administrators may decide not to renew a contract for a non-tenured instructor after the academic year but they cannot terminate during. That means hiring and budget decisions have to be made well in advance.

Back in 2007 I was in the middle of this dilemma. I was the founder and Chair of the Idaho State University Budget Committee. Our mandate, as I saw it, was to keep abreast of economic developments so we could best advise administrators of “hiccups” leading to reductions in state allocations to higher education. Once those came about, we would provide advice on budget allocations to programs and hiring. Academic hires have to be done months ahead of time so timely input meant looking ahead at least six months. It was within that time frame I warned our higher administration of the coming economic slowdown and real estate problems at the epicenter of the Financial Crisis. That message went unheeded at the time so, for the next couple of years, our committee was saddled with helping the administration muddle through ever diminishing budgets.

The unemployment rate at the time of my warning in 2007 was 4.4%, wages increased by 0.3% for the month and 4.4% for the year, and S&P 500 profits were up 16% for the year. GDP growth was pegged at 3%. Sound familiar? There was plenty of reason to be optimistic and yet, the future did not play out that way. The same will happen this year, although the main factors behind the economic stall will be different.

There is a financial storm developing. This time around, the low-pressure front will be due to demographic forces resulting in a decrease in spending from the 46-50 age group, a group dubbed the peak spenders. There will be a prolonged and marked decrease in consumer spending that will lead to a protracted economic downturn starting this year and lasting as long as 2023.

State general accounts will dwindle as sales tax revenues drop and a rise in unemployment leads to lower personal tax revenues. These are the two main pillars filling state coffers. The two others are real estate and corporate taxes. While real estate tax revenue will remain steady, corporate tax revenue will mirror plummeting corporate profits. The bottom line is that state support for public universities will take a cut and once again these institutions will have the difficult task of managing their budgets by reducing personnel. This is, therefore, no time to be dreaming about expanding departments, but instead, a time of planning for retrenchment.

Administrators should shun the temptation to pass down the buck and use university reserves to meet the immediate challenge. Next year will be no better. In fact, this downhill process will continue to get worse, and as I mentioned above, will last until 2023. University officials will be forced to face the music at some point in time so they might as well brainstorm and come up with a 5- or 6-year plan to deal with the malaise.

The warning goes double for those invested in the stock market. The same forces at work within state finances will also hobble our economy and wreak havoc on corporate profits and prices. Stock portfolios will take a substantial hit. My advice is to heed the current stock market warning. We just went through a correction, but these are only birth pangs of the financial storm ahead. The wise will use any uptick as an opportunity to whittle down stock holdings. There will be many who will mock me now, but when the brunt of the tempest comes you will want to be totally out of the stock market.