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AI and the Productivity Paradox

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AI and the Productivity Paradox

GUEST POST from Greg Satell

In the 1970’s and 80’s, business investment in computer technology were increasing by more than twenty percent per year. Strangely though, productivity growth had decreased during the same period. Economists found this turn of events so strange that they called it the productivity paradox to underline their confusion.

Productivity growth would take off in the late 1990s, but then mysteriously drop again during the mid-aughts. At each juncture, experts would debate whether digital technology produced real value or if it was all merely a mirage. The debate would continue even as industry after industry was disrupted.

Today, that debate is over, but a new one is likely to begin over artificial intelligence. Much like in the early 1970s, we have increasing investment in a new technology, diminished productivity growth and “experts” predicting massive worker displacement . Yet now we have history and experience to guide us and can avoid making the same mistakes.

You Can’t Manage (Or Evaluate) What You Can’t Measure

The productivity paradox dumbfounded economists because it violated a basic principle of how a free market economy is supposed to work. If profit seeking businesses continue to make substantial investments, you expect to see a return. Yet with IT investment in the 70s and 80s, firms continued to increase their investment with negligible measurable benefit.

A paper by researchers at the University of Sheffield sheds some light on what happened. First, productivity measures were largely developed for an industrial economy, not an information economy. Second, the value of those investments, while substantial, were a small portion of total capital investment. Third, the aggregate productivity numbers didn’t reflect differences in management performance.

Consider a widget company in the 1970s that invested in IT to improve service so that it could ship out products in less time. That would improve its competitive position and increase customer satisfaction, but it wouldn’t produce any more widgets. So, from an economic point of view, it wouldn’t be a productive investment. Rival firms might then invest in similar systems to stay competitive but, again, widget production would stay flat.

So firms weren’t investing in IT to increase productivity, but to stay competitive. Perhaps even more importantly, investment in digital technology in the 70s and 80s was focused on supporting existing business models. It wasn’t until the late 90s that we began to see significant new business models being created.

The Greatest Value Comes From New Business Models—Not Cost Savings

Things began to change when firms began to see the possibilities to shift their approach. As Josh Sutton, CEO of Agorai, an AI marketplace, explained to me, “The businesses that won in the digital age weren’t necessarily the ones who implemented systems the best, but those who took a ‘digital first’ mindset to imagine completely new business models.”

He gives the example of the entertainment industry. Sure, digital technology revolutionized distribution, but merely putting your programming online is of limited value. The ones who are winning are reimagining storytelling and optimizing the experience for binge watching. That’s the real paradigm shift.

“One of the things that digital technology did was to focus companies on their customers,” Sutton continues. “When switching costs are greatly reduced, you have to make sure your customers are being really well served. Because so much friction was taken out of the system, value shifted to who could create the best experience.”

So while many companies today are attempting to leverage AI to provide similar service more cheaply, the really smart players are exploring how AI can empower employees to provide a much better service or even to imagine something that never existed before. “AI will make it possible to put powerful intelligence tools in the hands of consumers, so that businesses can become collaborators and trusted advisors, rather than mere service providers,” Sutton says.

It Takes An Ecosystem To Drive Impact

Another aspect of digital technology in the 1970s and 80s was that it was largely made up of standalone systems. You could buy, say, a mainframe from IBM to automate back office systems or, later, Macintoshes or a PCs with some basic software to sit on employees desks, but that did little more than automate basic clerical tasks.

However, value creation began to explode in the mid-90s when the industry shifted from systems to ecosystems. Open source software, such as Apache and Linux, helped democratize development. Application developers began offering industry and process specific software and a whole cadre of systems integrators arose to design integrated systems for their customers.

We can see a similar process unfolding today in AI, as the industry shifts from one-size-fits-all systems like IBM’s Watson to a modular ecosystem of firms that provide data, hardware, software and applications. As the quality and specificity of the tools continues to increase, we can expect the impact of AI to increase as well.

In 1987, Robert Solow quipped that, “ You can see the computer age everywhere but in the productivity statistics,” and we’re at a similar point today. AI permeates our phones, smart speakers in our homes and, increasingly, the systems we use at work. However, we’ve yet to see a measurable economic impact from the technology. Much like in the 70s and 80s, productivity growth remains depressed. But the technology is still in its infancy.

We’re Just Getting Started

One of the most salient, but least discussed aspects of artificial intelligence is that it’s not an inherently digital technology. Applications like voice recognition and machine vision are, in fact, inherently analog. The fact that we use digital technology to execute machine learning algorithms is actually often a bottleneck.

Yet we can expect that to change over the next decade as new computing architectures, such as quantum computers and neuromorphic chips, rise to the fore. As these more powerful technologies replace silicon chips computing in ones and zeroes, value will shift from bits to atoms and artificial intelligence will be applied to the physical world.

“The digital technology revolutionized business processes, so it shouldn’t be a surprise that cognitive technologies are starting from the same place, but that’s not where they will end up. The real potential is driving processes that we can’t manage well today, such as in synthetic biology, materials science and other things in the physical world,” Agorai’s Sutton told me.

In 1987, when Solow made his famous quip, there was no consumer Internet, no World Wide Web and no social media. Artificial intelligence was largely science fiction. We’re at a similar point today, at the beginning of a new era. There’s still so much we don’t yet see, for the simple reason that so much has yet to happen.

— Article courtesy of the Digital Tonto blog
— Image credit: Pexels

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The Hard Problem of Consciousness is Not That Hard

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The Hard Problem of Consciousness is Not That Hard

GUEST POST from Geoffrey A. Moore

We human beings like to believe we are special—and we are, but not as special as we might like to think. One manifestation of our need to be exceptional is the way we privilege our experience of consciousness. This has led to a raft of philosophizing which can be organized around David Chalmers’ formulation of “the hard problem.”

In case this is a new phrase for you, here is some context from our friends at Wikipedia:

“… even when we have explained the performance of all the cognitive and behavioral functions in the vicinity of experience—perceptual discrimination, categorization, internal access, verbal report—there may still remain a further unanswered question: Why is the performance of these functions accompanied by experience?”

— David Chalmers, Facing up to the problem of consciousness

The problem of consciousness, Chalmers argues, is two problems: the easy problems and the hard problem. The easy problems may include how sensory systems work, how such data is processed in the brain, how that data influences behavior or verbal reports, the neural basis of thought and emotion, and so on. The hard problem is the problem of why and how those processes are accompanied by experience.3 It may further include the question of why these processes are accompanied by that particular experience rather than another experience.

The key word here is experience. It emerges out of cognitive processes, but it is not completely reducible to them. For anyone who has read much in the field of complexity, this should not come as a surprise. All complex systems share the phenomenon of higher orders of organization emerging out of lower orders, as seen in the frequently used example of how cells, tissues, organs, and organisms all interrelate. Experience is just the next level.

The notion that explaining experience is a hard problem comes from locating it at the wrong level of emergence. Materialists place it too low—they argue it is reducible to physical phenomena, which is simply another way of denying that emergence is a meaningful construct. Shakespeare is reducible to quantum effects? Good luck with that.

Most people’s problems with explaining experience, on the other hand, is that they place it too high. They want to use their own personal experience as a grounding point. The problem is that our personal experience of consciousness is deeply inflected by our immersion in language, but it is clear that experience precedes language acquisition, as we see in our infants as well as our pets. Philosophers call such experiences qualia, and they attribute all sorts of ineluctable and mysterious qualities to them. But there is a much better way to understand what qualia really are—namely, the pre-linguistic mind’s predecessor to ideas. That is, they are representations of reality that confer strategic advantage to the organism that can host and act upon them.

Experience in this context is the ability to detect, attend to, learn from, and respond to signals from our environment, whether they be externally or internally generated. Experiences are what we remember. That is why they are so important to us.

Now, as language-enabled humans, we verbalize these experiences constantly, which is what leads us to locate them higher up in the order of emergence, after language itself has emerged. Of course, we do have experiences with language directly—lots of them. But we need to acknowledge that our identity as experiencers is not dependent upon, indeed precedes our acquisition of, language capability.

With this framework in mind, let’s revisit some of the formulations of the hard problem to see if we can’t nip them in the bud.

  • The hard problem of consciousness is the problem of explaining why and how we have qualia or phenomenal experiences. Our explanation is that qualia are mental abstractions of phenomenal experiences that, when remembered and acted upon, confer strategic advantage to organisms under conditions of natural and sexual selection. Prior to the emergence of brains, “remembering and acting upon” is a function of chemical signals activating organisms to alter their behavior and, over time, to privilege tendencies that reinforce survival. Once brain emerges, chemical signaling is supplemented by electrical signaling to the same ends. There is no magic here, only a change of medium.
  • Annaka Harris poses the hard problem as the question of “how experience arise[s] out of non-sentient matter.” The answer to this question is, “level by level.” First sentience has to emerge from non-sentience. That happens with the emergence of life at the cellular level. Then sentience has to spread beyond the cell. That happens when chemical signaling enables cellular communication. Then sentience has to speed up to enable mobile life. That happens when electrical signaling enabled by nerves supplements chemical signaling enabled by circulatory systems. Then signaling has to complexify into meta-signaling, the aggregation of signals into qualia, remembered as experiences. Again, no miracles required.
  • Others, such as Daniel Dennett and Patricia Churchland believe that the hard problem is really more of a collection of easy problems, and will be solved through further analysis of the brain and behavior. If so, it will be through the lens of emergence, not through the mechanics of reductive materialism.
  • Consciousness is an ambiguous term. It can be used to mean self-consciousness, awareness, the state of being awake, and so on. Chalmers uses Thomas Nagel’s definition of consciousness: the feeling of what it is like to be something. Consciousness, in this sense, is synonymous with experience. Now we are in the language-inflected zone where we are going to get consciousness wrong because we are entangling it in levels of emergence that come later. Specifically, to experience anything as like anything else is not possible without the intervention of language. That is, likeness is not a qualia, it is a language-enabled idea. Thus, when Thomas Nagel famously asked, “What is it like to be a bat?” he is posing a question that has meaning only for humans, never for bats.

Going back to the first sentence above, self-consciousness is another concept that has been language-inflected in that only human beings have selves. Selves, in other words, are creations of language. More specifically, our selves are characters embedded in narratives, and use both the narratives and the character profiles to organize our lives. This is a completely language-dependent undertaking and thus not available to pets or infants. Our infants are self-sentient, but it is not until the little darlings learn language, hear stories, then hear stories about themselves, that they become conscious of their own selves as separate and distinct from other selves.

On the other hand, if we use the definitions of consciousness as synonymous with awareness or being awake, then we are exactly at the right level because both those capabilities are the symptoms of, and thus synonymous with, the emergence of consciousness.

  • Chalmers argues that experience is more than the sum of its parts. In other words, experience is irreducible. Yes, but let’s not be mysterious here. Experience emerges from the sum of its parts, just like any other layer of reality emergences from its component elements. To say something is irreducible does not mean that it is unexplainable.
  • Wolfgang Fasching argues that the hard problem is not about qualia, but about pure what-it-is-like-ness of experience in Nagel’s sense, about the very givenness of any phenomenal contents itself:

Today there is a strong tendency to simply equate consciousness with qualia. Yet there is clearly something not quite right about this. The “itchiness of itches” and the “hurtfulness of pain” are qualities we are conscious of. So, philosophy of mind tends to treat consciousness as if it consisted simply of the contents of consciousness (the phenomenal qualities), while it really is precisely consciousness of contents, the very givenness of whatever is subjectively given. And therefore, the problem of consciousness does not pertain so much to some alleged “mysterious, nonpublic objects”, i.e. objects that seem to be only “visible” to the respective subject, but rather to the nature of “seeing” itself (and in today’s philosophy of mind astonishingly little is said about the latter).

Once again, we are melding consciousness and language together when, to be accurate, we must continue to keep them separate. In this case, the dangerous phrase is “the nature of seeing.” There is nothing mysterious about seeing in the non-metaphorical sense, but that is not how the word is being used here. Instead, “seeing” is standing for “understanding” or “getting” or “grokking” (if you are nerdy enough to know Robert Heinlein’s Stranger in a Strange Land). Now, I think it is reasonable to assert that animals “grok” if by that we mean that they can reliably respond to environmental signals with strategic behaviors. But anything more than that requires the intervention of language, and that ends up locating consciousness per se at the wrong level of emergence.

OK, that’s enough from me. I don’t think I’ve exhausted the topic, so let me close by saying…

That’s what I think, what do you think?

Image Credit: Pixabay

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The Robots Aren’t Really Going to Take Over

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The Robots Aren't Really Going to Take Over

GUEST POST from Greg Satell

In 2013, a study at Oxford University found that 47% of jobs in the United States are likely to be replaced by robots over the next two decades. As if that doesn’t seem bad enough, Yuval Noah Harari, in his bestselling book Homo Deus, writes that “humans might become militarily and economically useless.” Yeesh! That doesn’t sound good.

Yet today, ten years after the Oxford Study, we are experiencing a serious labor shortage. Even more puzzling is that the shortage is especially acute in manufacturing, where automation is most pervasive. If robots are truly taking over, then why are having trouble finding enough humans to do work that needs being done?

The truth is that automation doesn’t replace jobs, it replaces tasks and when tasks become automated, they largely become commoditized. So while there are significant causes for concern about automation, such as increasing returns to capital amid decreasing returns to labor, the real danger isn’t with automation itself, but what we choose to do with it.

Organisms Are Not Algorithms

Harari’s rationale for humans becoming useless is his assertion that “organisms are algorithms.” Much like a vending machine is programed to respond to buttons, humans and other animals are programed by genetics and evolution to respond to “sensations, emotions and thoughts.” When those particular buttons are pushed, we respond much like a vending machine does.

He gives various data points for this point of view. For example, he describes psychological experiments in which, by monitoring brainwaves, researchers are able to predict actions, such as whether a person will flip a switch, even before he or she is aware of it. He also points out that certain chemicals, such as Ritalin and Prozac, can modify behavior.

Therefore, he continues, free will is an illusion because we don’t choose our urges. Nobody makes a conscious choice to crave chocolate cake or cigarettes any more than we choose whether to be attracted to someone other than our spouse. Those things are a product of our biological programming.

Yet none of this is at all dispositive. While it is true that we don’t choose our urges, we do choose our actions. We can be aware of our urges and still resist them. In fact, we consider developing the ability to resist urges as an integral part of growing up. Mature adults are supposed to resist things like gluttony, adultery and greed.

Revealing And Building

If you believe that organisms are algorithms, it’s easy to see how humans become subservient to machines. As machine learning techniques combine with massive computing power, machines will be able to predict, with great accuracy, which buttons will lead to what actions. Here again, an incomplete picture leads to a spurious conclusion.

In his 1954 essay, The Question Concerning Technology the German philosopher Martin Heidegger sheds some light on these issues. He described technology as akin to art, in that it reveals truths about the nature of the world, brings them forth and puts them to some specific use. In the process, human nature and its capacity for good and evil is also revealed.

He gives the example of a hydroelectric dam, which reveals the energy of a river and puts it to use making electricity. In much the same sense, Mark Zuckerberg did not “build” a social network at Facebook, but took natural human tendencies and channeled them in a particular way. After all, we go online not for bits or electrons, but to connect with each other.

In another essay, Building Dwelling Thinking, Heidegger explains that building also plays an important role, because to build for the world, we first must understand what it means to live in it. Once we understand that Mark Zuckerberg, or anyone else for that matter, is working to manipulate us, we can work to prevent it. In fact, knowing that someone or something seeks to control us gives us an urge to resist. If we’re all algorithms, that’s part of the code.
Social Skills Will Trump Cognitive Skills

All of this is, of course, somewhat speculative. What is striking, however, is the extent to which the opposite of what Harari and other “experts” predict is happening. Not only have greater automation and more powerful machine learning algorithms not led to mass unemployment it has, as noted above, led to a labor shortage. What gives?

To understand what’s going on, consider the legal industry, which is rapidly being automated. Basic activities like legal discovery are now largely done by algorithms. Services like LegalZoom automate basic filings. There are even artificial intelligence systems that can predict the outcome of a court case better than a human can.

So it shouldn’t be surprising that many experts predict gloomy days ahead for lawyers. By now, you can probably predict the punchline. The number of lawyers in the US has increased by 15% since 2008 and it’s not hard to see why. People don’t hire lawyers for their ability to hire cheap associates to do discovery, file basic documents or even, for the most part, to go to trial. In large part, they want someone they can trust to advise them.

The true shift in the legal industry will be from cognitive to social skills. When much of the cognitive heavy lifting can be done by machines, attorneys who can show empathy and build trust will have an advantage over those who depend on their ability to retain large amounts of information and read through lots of documents.

Value Never Disappears, It Just Shifts To Another Place

In 1900, 30 million people in the United States worked as farmers, but by 1990 that number had fallen to under 3 million even as the population more than tripled. So, in a matter of speaking, 90% of American agriculture workers lost their jobs, mostly due to automation. Yet somehow, the twentieth century was seen as an era of unprecedented prosperity.

You can imagine anyone working in agriculture a hundred years ago would be horrified to find that their jobs would vanish over the next century. If you told them that everything would be okay because they could find work as computer scientists, geneticists or digital marketers, they would probably have thought that you were some kind of a nut.

But consider if you told them that instead of working in the fields all day, they could spend that time in a nice office that was cool and dry because of something called “air conditioning,” and that they would have machines that cook meals without needing wood to be chopped and hauled. To sweeten the pot you could tell them that ”work” would mostly consist largely of talking to other people. They may have imagined it as a paradise.

The truth is that value never disappears, it just shifts to another place. That’s why today we have less farmers, but more food and, for better or worse, more lawyers. It is also why it’s highly unlikely that the robots will take over, because we are not algorithms. We have the power to choose.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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A Triumph of Artificial Intelligence Rhetoric

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Understanding ChatGPT

A Triumph of Artificial Intelligence Rhetoric - Understanding ChatGPT

GUEST POST from Geoffrey A. Moore

I recently finished reading Stephen Wolfram’s very approachable introduction to ChatGPT, What is ChatGPT Doing . . . And Why Does It Work?, and I encourage you to do the same. It has sparked a number of thoughts that I want to share in this post.

First, if I have understood Wolfram correctly, what ChatGPT does can be summarized as follows:

  1. Ingest an enormous corpus of text from every available digitized source.
  2. While so doing, assign to each unique word a unique identifier, a number that will serve as a token to represent that word.
  3. Within the confines of each text, record the location of every token relative to every other token.
  4. Using just these two elements—token and location—determine for every word in the entire corpus the probability of it being adjacent to, or in the vicinity of, every other word.
  5. Feed these probabilities into a neural network to cluster words and build a map of relationships.
  6. Leveraging this map, given any string of words as a prompt, use the neural network to predict the next word (just like AutoCorrect).
  7. Based on feedback from so doing, adjust the internal parameters of the neural network to improve its performance.
  8. As performance improves, extend the reach of prediction from the next word to the next phrase, then to the next clause, the next sentence, the next paragraph, and so on, improving performance at each stage by using feedback to further adjust its internal parameters.
  9. Based on all of the above, generate text responses to user questions and prompts that reviewers agree are appropriate and useful.

OK, I concede this is a radical oversimplification, but for the purposes of this post, I do not think I am misrepresenting what is going on, specifically when it comes to making what I think is the most important point to register when it comes to understanding ChatGPT. That point is a simple one. ChatGPT has no idea what it is talking about.

Indeed, ChatGPT has no ideas of any kind—no knowledge or expertise—because it has no semantic information. It is all math. Math has been used to strip words of their meaning, and that meaning is not restored until a reader or user engages with the output to do so, using their own brain, not ChatGPT’s. ChatGPT is operating entirely on form and not a whit on content. By processing the entirety of its corpus, it can generate the most probable sequence of words that correlates with the input prompt it had been fed. Additionally, it can modify that sequence based on subsequent interactions with an end user. As human beings participating in that interaction, we process these interactions as a natural language conversation with an intelligent agent, but that is not what is happening at all. ChatGPT is using our prompts to initiate a mathematical exercise using tokens and locations as its sole variables.

OK, so what? I mean, if it works, isn’t that all that matters? Not really. Here are some key concerns.

First, and most importantly, ChatGPT cannot be expected to be self-governing when it comes to content. It has no knowledge of content. So, whatever guardrails one has in mind would have to be put in place either before the data gets into ChatGPT or afterward to intercept its answers prior to passing them along to users. The latter approach, however, would defeat the whole purpose of using it in the first place by undermining one of ChatGPT’s most attractive attributes—namely, its extraordinary scalability. So, if guardrails are required, they need to be put in place at the input end of the funnel, not the output end. That is, by restricting the datasets to trustworthy sources, one can ensure that the output will be trustworthy, or at least not malicious. Fortunately, this is a practical solution for a reasonably large set of use cases. To be fair, reducing the size of the input dataset diminishes the number of examples ChatGPT can draw upon, so its output is likely to be a little less polished from a rhetorical point of view. Still, for many use cases, this is a small price to pay.

Second, we need to stop thinking of ChatGPT as artificial intelligence. It creates the illusion of intelligence, but it has no semantic component. It is all form and no content. It is a like a spider that can spin an amazing web, but it has no knowledge of what it is doing. As a consequence, while its artifacts have authority, based on their roots in authoritative texts in the data corpus validated by an extraordinary amount of cross-checking computing, the engine itself has none. ChatGPT is a vehicle for transmitting the wisdom of crowds, but it has no wisdom itself.

Third, we need to fully appreciate why interacting with ChatGPT is so seductive. To do so, understand that because it constructs its replies based solely on formal properties, it is selecting for rhetoric, not logic. It is delivering the optimal rhetorical answer to your prompt, not the most expert one. It is the one that is the most popular, not the one that is the most profound. In short, it has a great bedside manner, and that is why we feel so comfortable engaging with it.

Now, given all of the above, it is clear that for any form of user support services, ChatGPT is nothing less than a godsend, especially where people need help learning how to do something. It is the most patient of teachers, and it is incredibly well-informed. As such, it can revolutionize technical support, patient care, claims processing, social services, language learning, and a host of other disciplines where users are engaging with a technical corpus of information or a system of regulated procedures. In all such domains, enterprises should pursue its deployment as fast as possible.

Conversely, wherever ambiguity is paramount, wherever judgment is required, or wherever moral values are at stake, one must not expect ChatGPT to be the final arbiter. That is simply not what it is designed to do. It can be an input, but it cannot be trusted to be the final output.

That’s what I think. What do you think?

Image Credit: Pixabay

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Generation AI Replacing Generation Z

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Generation AI Replacing Generation Z

by Braden Kelley

The boundary lines between different named generations are a bit fuzzy but the goal should always be to draw the boundary at an event significant enough to create substantial behavior changes in the new generation worthy of consideration in strategy formation.

I believe we have arrived at such a point and that it is time for GenZ to cede the top of strategy mountain to a new generation I call Generation AI (GenAI).

The dividing line for Generation AI falls around 2014 and the people of GenAI are characterized by being the first group of people to grow up not knowing a world without easy access to generative artificial intelligence (AI) tools that begin to transform their interactions with our institutions and each other.

We have already seen professors and teachers having to police AI-generated school essays, while the rest of us are trying to cope with frighteningly realistic deep fake audio and video. But what other impacts on people’s behavior will we see as a result of the coming ubiquity of artificial intelligence?

It is important to remember that generative artificial intelligence is not really artificial intelligence but collective intelligence informed by what we the people have contributed to the training/reference set. As such these large language models are predicting the next word or combining existing content based on whatever training set they are exposed to. They are not creating original thought.

Generative AI is being built into nearly all of our existing software and cloud tools, and GenAI will grow up only knowing a reality where every application and web site they interact with will have an AI component to it. Generation AI will not know a time where they cannot ask an AI, in the same way that GenZ relies on social search, and Gen X and Millenials assume search engines hold their answers.

Our brains are changing to focus more on processing and less on storage. These changes make us more capable, but more vulnerable too.

This new AI technology represents a double-edge sword and its effects could fall on either edge of the sword in different areas:

Option 1 – Best Case

  • Generative AI will amplify creativity by encouraging recombination of existing images, text, audio and video in new inspiring ways using the outputs of AI as inputs into human creativity

Option 2 – Worst Case

  • Generative AI will reduce creativity because people will become reliant on using artificial intelligence to create, creating an echo chamber of new content only created from existing content, leading to AI outputs becoming the only outputs and a world where people spend more time interacting with AI’s than with other people

Which of these two options on the impact of AI reliance do you see as the most likely in the areas where you focus?

How do you see Generation AI impacting the direction of societies around the world?

Are you planning to add Generation AI to your marketing strategies and strategic planning for 2024 or beyond?

Reference

For reference, here is timeline of previous American generations according to an article from NPR:

Though there is a consensus on the general time period for generations, there is not an agreement on the exact year that each generation begins and ends.

Generation Z – Born 2001-2013 (Age 10-22)

These kids were the first born with the Internet and are suspected to be the most individualistic and technology-dependent generation. Sometimes referred to as the iGeneration.

EDITOR’S NOTE: This description is erroneous, the differentiating factor of GenZ is that they experienced the rise of social media.

Millennials – Born 1980-2000 (Age 23-43)

They experienced the rise of the Internet, Sept. 11 and the wars that followed. Sometimes called Generation Y. Because of their dependence on technology, they are said to be entitled and narcissistic.

Generation X – Born 1965-1979 (Age 44-58)

They were originally called the baby busters because fertility rates fell after the boomers. As teenagers, they experienced the AIDs epidemic and the fall of the Berlin Wall. Sometimes called the MTV Generation, the “X” in their name refers to this generation’s desire not to be defined.

EDITOR’S NOTE: GenX also experienced the rise of the personal computer and this has influenced their parenting of a large portion of Millenials and GenZ

Baby Boomers – Born 1943-1964 (Age 59-80)

The boomers were born during an economic and baby boom following World War II. These hippie kids protested against the Vietnam War and participated in the civil rights movement, all with rock ‘n’ roll music blaring in the background.

Silent Generation – Born 1925-1942 (Age 81-98)

They were too young to see action in World War II and too old to participate in the fun of the Summer of Love. This label describes their conformist tendencies and belief that following the rules was a sure ticket to success.

GI Generation – Born 1901-1924 (Age 99+)

They were teenagers during the Great Depression and fought in World War II. Sometimes called the greatest generation (following a book by journalist Tom Brokaw) or the swing generation because of their jazz music.

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When Innovation Becomes Magic

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When Innovation Becomes Magic

GUEST POST from Pete Foley

Arthur C Clarke’s 3rd Law famously stated:

“Any sufficiently advanced technology is indistinguishable from magic”

In other words, if the technology of an advanced civilization is so far beyond comprehension, it appears magical to a less advanced one. This could take the form of a human encounter with a highly advanced extraterrestrial civilization, how current technology might be viewed by historical figures, or encounters between human cultures with different levels of scientific and technological knowledge.

Clarke’s law implicitly assumed that knowledge within a society is sufficiently democratized that we never view technology within a civilization as ‘magic’.  But a combination of specialization, rapid advancements in technology, and a highly stratified society means this is changing.  Generative AI, Blockchain and various forms of automation are all ‘everyday magic’ that we increasingly use, but mostly with little more than an illusion of understanding around how they work.  More technological leaps are on the horizon, and as innovation accelerates exponentially, we are all going to have to navigate a world that looks and feels increasingly magical.   Knowing how to do this effectively is going to become an increasingly important skill for us all.  

The Magic Behind the Curtain:  So what’s the problem? Why do we need to understand the ‘magic’ behind the curtain, as long as we can operate the interface, and reap the benefits?  After all, most of us use phones, computers, cars, or take medicines without really understanding how they work.  We rely on experts to guide us, and use interfaces that help us navigate complex technology without a need for deep understanding of what goes on behind the curtain.

It’s a nuanced question.  Take a car as an analogy.  We certainly don’t need to know how to build one in order to use one.  But we do need to know how to operate it and understand what it’s performance limitations are.  It also helps to have at least some basic knowledge of how it works; enough to change a tire on a remote road, or to have some concept of basic mechanics to minimize the potential of being ripped off by a rogue mechanic.  In a nutshell, the more we understand it, the more efficiently, safely and economically we leverage it.  It’s a similar situation with medicine.  It is certainly possible to defer all of our healthcare decisions to a physician.  But people who partner with their doctors, and become advocates for their own health generally have superior outcomes, are less likely to die from unintended contraindications, and typically pay less for healthcare.  And this is not trivial.  The third leading cause of death in Europe behind cancer and heart disease are issues associated with prescription medications.  We don’t need to know everything to use a tool, but in most cases, the more we know the better

The Speed/Knowledge Trade-Off:  With new, increasingly complex technologies coming at us in waves, it’s becoming increasing challenging to make sense of what’s ‘behind the curtain’. This has the potential for costly mistakes.  But delaying embracing technology until we fully understand it can come with serious opportunity costs.  Adopt too early, and we risk getting it wrong, too late and we ‘miss the bus’.  How many people who invested in crypto currency or NFT’s really understood what they were doing?  And how many of those have lost on those deals, often to the benefit of those with deeper knowledge?  That isn’t to in anyway suggest that those who are knowledgeable in those fields deliberately exploit those who aren’t, but markets tend to reward those who know, and punish those who don’t.    

The AI Oracle:  The recent rise of Generative AI has many people treating it essentially as an oracle.  We ask it a question, and it ‘magically’ spits out an answer in a very convincing and sharable format.  Few of us understand the basics of how it does this, let alone the details or limitations. We may not call it magic, but we often treat it as such.  We really have little choice; as we lack sufficient understanding to apply quality critical thinking to what we are told, so have to take answers on trust.  That would be brilliant if AI was foolproof.  But while it is certainly right a lot of the time, it does make mistakes, often quite embarrassing ones. . For example, Google’s BARD incorrectly claimed the James Webb Space Telescope had taken the first photo of a planet outside our solar system, which led to panic selling of parent company Alphabet’s stock.  Generative AI is a superb innovation, but its current iterations are far from perfect.  They are limited by the data bases they are fed on, are extremely poor at spotting their own mistakes, can be manipulated by the choice of data sets they are trained on, and they lack the underlying framework of understanding that is essential for critical thinking or for making analogical connections.  I’m sure that we’ll eventually solve these issues, either with iterations of current tech, or via integration of new technology platforms.  But until we do, we have a brilliant, but still flawed tool.  It’s mostly right, is perfect for quickly answering a lot of questions, but its biggest vulnerability is that most users have pretty limited capability to understand when it’s wrong.

Technology Blind Spots: That of course is the Achilles Heel, or blind spot and a dilemma. If an answer is wrong, and we act on it without realizing, it’s potentially trouble. But if we know the answer, we didn’t really need to ask the AI. Of course, it’s more nuanced than that.  Just getting the right answer is not always enough, as the causal understanding that we pick up by solving a problem ourselves can also be important.  It helps us to spot obvious errors, but also helps to generate memory, experience, problem solving skills, buy-in, and belief in an idea.  Procedural and associative memory is encoded differently to answers, and mechanistic understanding helps us to reapply insights and make analogies. 

Need for Causal Understanding.  Belief and buy-in can be particularly important. Different people respond to a lack of ‘internal’ understanding in different ways.  Some shy away from the unknown and avoid or oppose what they don’t understand. Others embrace it, and trust the experts.  There’s really no right or wrong in this.  Science is a mixture of both approaches it stands on the shoulders of giants, but advances based on challenging existing theories.  Good scientists are both data driven and skeptical.  But in some cases skepticism based on lack of causal understanding can be a huge barrier to adoption. It has contributed to many of the debates we see today around technology adoption, including genetically engineered foods, efficacy of certain pharmaceuticals, environmental contaminants, nutrition, vaccinations, and during Covid, RNA vaccines and even masks.  Even extremely smart people can make poor decisions because of a lack of causal understanding.  In 2003, Steve Jobs was advised by his physicians to undergo immediately surgery for a rare form of pancreatic cancer.  Instead he delayed the procedure for nine months and attempted to treat himself with alternative medicine, a decision that very likely cut his life tragically short.

What Should We Do?  We need to embrace new tools and opportunities, but we need to do so with our eyes open.   Loss aversion, and the fear of losing out is a very powerful motivator of human behavior, and so an important driver in the adoption of new technology.  But it can be costly. A lot of people lost out with crypto and NFT’s because they had a fairly concrete idea of what they could miss out on if they didn’t engage, but a much less defined idea of the risk, because they didn’t deeply understand the system. Ironically, in this case, our loss aversion bias caused a significant number of people to lose out!

Similarly with AI, a lot of people are embracing it enthusiastically, in part because they are afraid of being left behind.  That is probably right, but it’s important to balance this enthusiasm with an understanding of its potential limitations.  We may not need to know how to build a car, but it really helps to know how to steer and when to apply the brakes .   Knowing how to ask an AI questions, and when to double check answers are both going to be critical skills.  For big decisions, ‘second opinions’ are going to become extremely important.   And the human ability to interpret answers through a filter of nuance, critical thinking, different perspectives, analogy and appropriate skepticism is going to be a critical element in fully leveraging AI technology, at least for now. 

Today AI is still a tool, not an oracle. It augments our intelligence, but for complex, important or nuanced decisions or information retrieval, I’d be wary of sitting back and letting it replace us.  Its ability to process data in quantity is certainly superior to any human, but we still need humans to interpret, challenge and integrate information.  The winners of this iteration of AI technology will be those who become highly skilled at walking that line, and who are good at managing the trade off between speed and accuracy using AI as a tool.  The good news is that we are naturally good at this, it’s a critical function of the human brain, embodied in the way it balances Kahneman’s System 1 and System 2 thinking. Future iterations may not need us, but for now AI is a powerful partner and tool, but not a replacement

Image credit: Pixabay

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Sustaining Imagination is Hard

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by Braden Kelley

Recently I stumbled across a new Royal Institute video of Martin Reeves, a managing director and senior partner in BCG’s San Francisco office. Martin leads the BCG Henderson Institute, BCG’s vehicle for exploring ideas from beyond the world of business, which have implications for business strategy management.

I previously interviewed Martin along with his co-author Dr. Jack Fuller in a post titled ‘Building an Imagination Machine‘. In this video you’ll find him presenting content along similar themes. I think you’ll enjoy it:

Bonus points to anyone who can name this napkin sketch in the comments.

In the video Martin explores several of the frameworks introduced in his book The Imagination Machine. One of the central tenets of Martin’s video is the fact that sustaining imagination is hard. There are three core reasons why this is so:

  1. Overspecialization – As companies grow, jobs become increasingly smaller in scope and greater in specialization, leading to myopia as fewer and fewer people see the problems that the company started to solve in the first place
  2. Insularity – As companies grow, the majority of employees shift from being externally facing to being internally facing, isolating more and more employees from the customer and their evolving wants and needs
  3. Complacency – As companies become successful, predictably, the successful parts of the business receive most of the attention and investment, making it difficult for new efforts to receive the care and feeding necessary for them to grow and dare I say – replace – the currently idolized parts of the business

I do like the notion Martin presents that companies wishing to be continuously successful, continuously seek to be surprised and invest energy in rethinking, exploring and probing in areas where they find themselves surprised.

Martin also explores some of the common misconceptions about imagination, including the ideas that imagination is:

  1. A solitary endeavor
  2. It comes out of nowhere
  3. Unmanageable

And finally, Martin puts forward his ideas on how imagination can be harnessed systematically, using a simple six-step model:

  1. Seduction – Where can we find surprise?
  2. Idea – Do we embrace the messiness of the napkin sketch? Or expect perfection?
  3. Collision – Where can we collide this idea with the real world for validation or more surprise?
  4. Epidemic – How can we foster collective imagination? What behaviors are we encouraging?
  5. New Ordinary – How can we create new norms? What evolvable scripts can we create that live inbetween the 500-page manual and the one-sentence vision?
  6. Encore – How can we sustain imagination? How can we maintain a Day One mentality?

And no speech in 2023 would be complete without some analysis of what role artificial intelligence (AI) has to play. Martin’s perspective is that when it comes to the different levels of cognition, AI might be good at finding patterns of correlation, but humans have more advanced capabilities than machines when it comes to finding causation and counterfactual opportunities. There is an opportunity for all of us to think about how we can leverage AI across the six steps in the model above to accelerate or enhance our human efforts.

To close, Martin highlighted that when it comes to leading re-imagination, it is important to look outward, to self-disrupt, to establish heroic goals, utilize multiple mental models, and foster playfulness and experimentation across the organization to help keep imagination alive.

p.s. If you’re committed to learning the art and science of getting to the future first, then be sure and subscribe to my newsletter to make sure you’re one of the first to get certified in the FutureHacking™ methodology.

Image credits: Netflix

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Just Because We Can, Doesn’t Mean That We Should!

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Just Because We Can, Doesn’t Mean That We Should!

GUEST POST from Pete Foley

An article on innovation from the BBC caught my eye this week. https://www.bbc.com/news/science-environment-64814781. After extensive research and experimentation, a group in Spain has worked out how to farm octopus. It’s clever innovation, but also comes with some ethical questions. The solution involves forcing highly intelligent, sentient animals together in unnatural environments, and then killing them in a slow, likely highly stressful way. And that triggers something that I believe we need to always keep front and center in innovation: Just Because We Can, Doesn’t Mean That We Should!

Pandora’s Box

It’s a conundrum for many innovations. Change opens Pandora’s Box, and with new possibilities come unknowns, new questions, new risks and sometimes, new moral dilemmas. And because our modern world is so complex, interdependent, and evolves so quickly, we can rarely fully anticipate all of these consequences at conception.

Scenario Planning

In most fields we routinely try and anticipate technical challenges, and run all sorts of stress, stability and consumer tests in an effort to anticipate potential problems. We often still miss stuff, especially when it’s difficult to place prototypes into realistic situations. Phones still catch fire, Hyundai’s can be surprisingly easy to steal, and airbags sometimes do more harm than good. But experienced innovators, while not perfect, tend to be pretty good at catching many of the worst technical issues.

Another Innovators Dilemma

Octopus farming doesn’t, as far as I know, have technical issues, but it does raise serious ethical questions. And these can sometimes be hard to spot, especially if we are very focused on technical challenges. I doubt that the innovators involved in octopus farming are intrinsically bad people intent on imposing suffering on innocent animals. But innovation requires passion, focus and ownership. Love is Blind, and innovators who’ve invested themselves into a project are inevitably biased, and often struggle to objectively view the downsides of their invention.

And this of course has far broader implications than octopus farming. The moral dilemma of innovation and unintended consequences has of course been brought into sharp focus with recent advances in AI.  In this case the stakes are much higher. Stephen Hawking and many others expressed concerns that while AI has the potential to provide incalculable benefits, it also has the potential to end the human race. While I personally don’t see CHATgpt as Armageddon, it is certainly evidence that Pandora’s Box is open, and none of us really knows how it will evolve, for better or worse.

What are our Solutions

So what can we do to try and avoid doing more harm than good? Do we need an innovator’s equivalent of the Hippocratic Oath? Should we as a community commit to do no harm, and somehow hold ourselves accountable? Not a bad idea in theory, but how could we practically do that? Innovation and risk go hand in hand, and in reality we often don’t know how an innovation will operate in the real world, and often don’t fully recognize the killer application associated with a new technology. And if we were to eliminate most risk from innovation, we’d also eliminate most progress. This said, I do believe how we balance progress and risk is something we need to discuss more, especially in light of the extraordinary rate of technological innovation we are experiencing, the potential size of its impact, and the increasing challenges associated with predicting outcomes as the pace of change accelerates.

Can We Ever Go Back?

Another issue is that often the choice is not simply ‘do we do it or not’, but instead ‘who does it first’? Frequently it’s not so much our ‘brilliance’ that creates innovation. Instead, it’s simply that all the pieces have just fallen into place and are waiting for someone to see the pattern. From calculus onwards, the history of innovation is replete with examples of parallel discovery, where independent groups draw the same conclusions from emerging data at about the same time.

So parallel to the question of ‘should we do it’ is ‘can we afford not to?’ Perhaps the most dramatic example of this was the nuclear bomb. For the team working the Manhattan Project it must have been ethically agonizing to create something that could cause so much human suffering. But context matters, and the Allies at the time were in a tight race with the Nazi’s to create the first nuclear bomb, the path to which was already sketched out by discoveries in physics earlier that century. The potential consequences of not succeeding were even more horrific than those of winning the race. An ethical dilemma of brutal proportions.

Today, as the pace of change accelerates, we face a raft of rapidly evolving technologies with potential for enormous good or catastrophic damage, and where Pandoras Box is already cracked open. Of course AI is one, but there are so many others. On the technical side we have bio-engineering, gene manipulation, ecological manipulation, blockchain and even space innovation. All of these have potential to do both great good and great harm. And to add to the conundrum, even if we were to decide to shut down risky avenues of innovation, there is zero guarantee that others would not pursue them. On the contrary, as bad players are more likely to pursue ethically dubious avenues of research.

Behavioral Science

And this conundrum is not limited to technical innovations. We are also making huge strides in understanding how people think and make decisions. This is superficially more subtle than AI or bio-manipulation, but as a field I’m close to, it’s also deeply concerning, and carries similar potential to do both great good or cause great harm. Public opinion is one of the few tools we have to help curb mis-use of technology, especially in democracies. But Behavioral Science gives us increasingly effective ways to influence and nudge human choices, often without people being aware they are being nudged. In parallel, technology has given us unprecedented capability to leverage that knowledge, via the internet and social media. There has always been a potential moral dilemma associated with manipulating human behavior, especially below the threshold of consciousness. It’s been a concern since the idea of subliminal advertising emerged in the 1950’s. But technical innovation has created a potentially far more influential infrastructure than the 1950’s movie theater.   We now spend a significant portion of our lives on line, and techniques such as memes, framing, managed choice architecture and leveraging mere exposure provide the potential to manipulate opinions and emotional engagement more profoundly than ever before. And the stakes have gotten higher, with political advertising, at least in the USA, often eclipsing more traditional consumer goods marketing in sheer volume.   It’s one thing to nudge someone between Coke and Pepsi, but quite another to use unconscious manipulation to drive preference in narrowly contested political races that have significant socio-political implications. There is no doubt we can use behavioral science for good, whether it’s helping people eat better, save better for retirement, drive more carefully or many other situations where the benefit/paternalism equation is pretty clear. But especially in socio-political contexts, where do we draw the line, and who decides where that line is? In our increasingly polarized society, without some oversight, it’s all too easy for well intentioned and passionate people to go too far, and in the worst case flirt with propaganda, and thus potentially enable damaging or even dangerous policy.

What Can or Should We Do?

We spend a great deal of energy and money trying to find better ways to research and anticipate both the effectiveness and potential unintended consequences of new technology. But with a few exceptions, we tend to spend less time discussing the moral implications of what we do. As the pace of innovations accelerates, does the innovation community need to adopt some form of ‘do no harm’ Hippocratic Oath? Or do we need to think more about educating, training, and putting processes in place to try and anticipate the ethical downsides of technology?

Of course, we’ll never anticipate everything. We didn’t have the background knowledge to anticipate that the invention of the internal combustion engine would seriously impact the world’s climate. Instead we were mostly just relieved that projections of cities buried under horse poop would no longer come to fruition.

But other innovations brought issues we might have seen coming with a bit more scenario-planning? Air bags initially increased deaths of children in automobile accidents, while prohibition in the US increased both crime and alcoholism. Hindsight is of course very clear, but could a little more foresight have anticipated these? Perhaps my favorite example unintended consequences is the ‘Cobra Effect’. The British in India were worried about the number of venomous cobra snakes, and so introduced a bounty for every dead cobra. Initially successful, this ultimately led to the breeding of cobras for bounty payments. On learning this, the Brits scrapped the reward. Cobra breeders then set the now-worthless snakes free. The result was more cobras than the original start-point. It’s amusing now, but it also illustrates the often significant gap between foresight and hindsight.

I certainly don’t have the answers. But as we start to stack up world changing technologies in increasingly complex, dynamic and unpredictable contexts, and as financial rewards often favor speed over caution, do we as an innovation community need to start thinking more about societal and moral risk? And if so, how could, or should we go about it?

I’d love to hear the opinions of the innovation community!

Image credit: Pixabay

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Rise of the Prompt Engineer

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Rise of the Prompt Engineer

GUEST POST from Art Inteligencia

The world of tech is ever-evolving, and the rise of the prompt engineer is just the latest development. Prompt engineers are software developers who specialize in building natural language processing (NLP) systems, like voice assistants and chatbots, to enable users to interact with computer systems using spoken or written language. This burgeoning field is quickly becoming essential for businesses of all sizes, from startups to large enterprises, to remain competitive.

Five Skills to Look for When Hiring a Prompt Engineer

But with the rapid growth of the prompt engineer field, it can be difficult to hire the right candidate. To ensure you’re getting the best engineer for your project, there are a few key skills you should look for:

1. Technical Knowledge: A competent prompt engineer should have a deep understanding of the underlying technologies used to create NLP systems, such as machine learning, natural language processing, and speech recognition. They should also have experience developing complex algorithms and working with big data.

2. Problem-Solving: Prompt engineering is a highly creative field, so the ideal candidate should have the ability to think outside the box and come up with innovative solutions to problems.

3. Communication: A prompt engineer should be able to effectively communicate their ideas to both technical and non-technical audiences in both written and verbal formats.

4. Flexibility: With the ever-changing landscape of the tech world, prompt engineers should be comfortable working in an environment of constant change and innovation.

5. Time Management: Prompt engineers are often involved in multiple projects at once, so they should be able to manage their own time efficiently.

These are just a few of the skills to look for when hiring a prompt engineer. The right candidate will be able to combine these skills to create effective and user-friendly natural language processing systems that will help your business stay ahead of the competition.

But what if you want or need to build your own artificial intelligence queries without the assistance of a professional prompt engineer?

Four Secrets of Writing a Good AI Prompt

As AI technology continues to advance, it is important to understand how to write a good prompt for AI to ensure that it produces accurate and meaningful results. Here are some of the secrets to writing a good prompt for AI.

1. Start with a clear goal: Before you begin writing a prompt for AI, it is important to have a clear goal in mind. What are you trying to accomplish with the AI? What kind of outcome do you hope to achieve? Knowing the answers to these questions will help you write a prompt that is focused and effective.

2. Keep it simple: AI prompts should be as straightforward and simple as possible. Avoid using jargon or complicated language that could confuse the AI. Also, try to keep the prompt as short as possible so that it is easier for the AI to understand.

3. Be specific: To get the most accurate results from your AI, you should provide a specific prompt that clearly outlines what you are asking. You should also provide any relevant information, such as the data or information that the AI needs to work with.

4. Test your prompt: Before you use your AI prompt in a real-world situation, it is important to test it to make sure that it produces the results that you are expecting. This will help you identify any issues with the prompt or the AI itself and make the necessary adjustments.

By following these tips, you can ensure that your AI prompt is effective and produces the results that you are looking for. Writing a good prompt for AI is a skill that takes practice, but by following these secrets you can improve your results.

So, whether you look to write your own AI prompts or feel the need to hire a professional prompt engineer, now you are equipped to be successful either way!

Image credit: Pexels

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AI is a Powerful New Tool for Entrepreneurs

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AI is a Powerful New Tool for Entrepreneurs

by Braden Kelley

In today’s digital, always connected world, Google too often stands as a gatekeeper between entrepreneurs and small businesses and financial success. Ranking well in the search engines requires time and expertise that many entrepreneurs and small business owners don’t have, because their focus must be on fine tuning the value proposition and operations of their business.

The day after Google was invented, the search engine marketing firm was probably created to make money off of hard working entrepreneurs and small businesses owners trying to make the most of their investment in a web site through search engine optimization (SEO), keyword advertising, and social media strategies.

According to IBISWorld the market size of the SEO & Internet Marketing Consulting industry is $75.0 Billion. Yes, that’s billion with a ‘b’.

Creating content for web sites is an even bigger market. According to Technavio the global content marketing size is estimated to INCREASE by $584.0 Billion between 2022 and 2027. This is the growth number. The market itself is MUCH larger.

The introduction of ChatGPT threatens to upend these markets, to the detriment of this group of businesses, but to the benefit to the nearly 200,000 dentists in the United States, more than 100,000 plumbers, million and a half real estate agents, and numerous other categories of small businesses.

Many of these content marketing businesses create a number of different types of content for the tens of millions of small businesses in the United States, from blog articles to tweets to Facebook pages and everything in-between. The content marketing agencies that small businesses hire recent college graduates or offshore resources in places like the Philippines, India, Pakistan, Ecuador, Romania, and lots of other locations around the world and bill their work to their clients at a much higher rate.

Outsourcing content creation has been a great way for small businesses to leverage external resources so they can focus on the business, but now may be the time to bring some of this content creation work back in house. Particularly where the content is pretty straightforward and informational for an average visitor to the web site.

With ChatGPT you can ask it to “write me an article on how to brush your teeth” or “write me ten tweets on teethbrushing” or “write me a facebook post on the most common reasons a toilet won’t flush.”

I asked it to do the last one for me and here is what it came up with:

Continue reading the rest of this article on CustomerThink (including the ChatGPT results)

Image credits: Pixabay

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