Guest Contributor | May 31, 2021 | 0
The future is here
Having been a market risk practitioner for the past two years, I always stand in awe at how financial reporters seem to manufacture all sorts of reasons why a stock, currency or any financial instrument has made a particular move in whichever direction.
Confirmation bias always avails a reason for the move, usually by coincidence and the piece of information that makes the most sense is presented as the cause of the effect. As they say hindsight is 20/20.
For those who are in the business of investment, in policy making and strategy, to see things before they take shape is truly an unparalleled quality. However this quality is only held by a few and even those who are given praise for their foresight always fail to see when the ground beneath them is shifting. Think of Kodak missing opportunities in digital photography.
There are currently huge leaps being made in technology across all business sectors, from finance to agriculture. One of particular interest is in the asset and risk management sector where human analysts are now laid off as firms apply artificial intelligence in the investment and risk mitigation processes, essentially the algorithm receives instructions, furthermore has the capability to learn and make new discoveries.
In the agriculture space, Monsanto launched a web and mobile service that increases a farmer’s profitability through customized field recommendations that maximize yield and minimize costs.
In the entertainment industry numerous musicians are at loggerheads with Alphabet (Google) over YouTube. Recording artists argue that the file sharing feature has caused a serious knock in album sales. In the past the most popular artists could easily reach platinum status within a week after the release of an album, now these same artists struggle to reach their weekly sales in several months.
This is the net result of file sharing components which are available on most downloading and live streaming sites. Whilst it is not all doom and gloom, statistics released by The International Federation of the Phonographic Industry (IFPI), an organisation that represents the interests of the recording industry worldwide reported in 2014 that for the first time, the industry had derived the same proportion of revenues from digital channels as from physical sales.
The trend has been growing in favour of digital channels. This scenario provided an opportunity for those in digital distribution such as Apple’s iTunes and posed obsolescence risk for traditional music hardware and distributors. Such is the nature of technological shifts.
In the legal profession the first artificially intelligent lawyer by the name of R.O.S.S was employed by bankruptcy law firm Baker and Hostetler. Andrew Arruda the designer of R.O.S.S sees this as a way of reducing legal fees since there will be no need to pay human lawyers and A.I lawyers are faster and more efficient when it comes to legal research.. This development coincides with concerns raised by Jason Furman, President Obama’s chief economist that A.I has the potential to eliminate good jobs faster than the US workforce could secure new ones, at least in the short term.
Like the introduction of the motor vehicle which changed the course of things, created new industry and made others obsolete, how will these new technologies affect the Namibian and African economy and society at large?
From communication applications to automated surgeons, the rate of change is increasing and it will surely have an impact on every citizen regardless if these effects are good or bad. What risk or opportunity assessment frameworks are professionals, business leaders, policy makers and society leaders alike putting in place to benefit or ease the blow of this fast expanding cycle?