How Are Artificial Intelligence and Big Data Influencing Innovation?
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“The world’s most valuable resource is no longer oil, but data.” – The Economist
Highlights from Today’s Story:
- Forbes’ recent piece, “Artificial Intelligence and Big Data: Good for Innovation?” explains how AI is firmly embedded throughout today’s economy, and how the ability to obtain data about customers has never been more imperative for business success.
- The most significant advances in AI are coming from “machine learning,” which requires mass amounts of data to create, test, and train the AI.
- As AI is becoming more important to the economy, so is data.
- A potential entrant to a given market that lacks access to good data faces substantial hurdles. This has resulted in regulators questioning the extent to which control over data creates barriers to entry. If barriers to entry are too high, new businesses will not enter, established organizations will not feel competitive pressures, and innovation could potentially suffer.
- Access to data helps firms move down a learning curve.
- “The real power – for good and ill – is in software and increasing returns to data. If one self-driving car company does well initially, it will be able to collect more data — and then further improve its algorithm. Other companies will not be able to catch up.” – Daron Acemoglu and Simon Johnson.
- Is innovation suffering? The evidence is mixed when we look at the rate of entry to markets by innovative firms in the recent past.
- Established firms spent $2 to $3 billion on AI-related acquisitions in 2016, and between $18 and $27 billion on internal corporate investment in AI-related projects in 2016, estimated McKinsey Global Institute.
- Data portability could be a potential policy solution.
What do you make of all of this? What’s your take on how AI and Big Data are influencing innovation in today’s marketplace? We encourage all sides of the conversation to chime in using the comments section below!