I am doing a series of write-ups on a brilliant article from Jefferey Funk. It merits a thorough analysis and how it can be adapted to the healthcare sector.
Shiller’s Irrational Exuberance is in full bloom today with a new speculative bubble involving smartphones, algorithms, Big Data, the Internet of Things, artificial intelligence (AI), blockchain, driverless vehicles, and robotics. The narrative began with Ray Kurzweil’s 2005 book, The Singularity is Near, and has expanded with bestsellers such as Erik Brynjolfsson and Andrew McAfee’s Race Against the Machine (2012), Peter Diamandis and Steven Kotler’s Abundance (2012), and Martin Ford’s The Rise of the Robots (2015).
It is not surprising that the brilliant PR agencies helped to churn out this narrative. Major global consulting firms that advised companies to invest their resources in the emerging field of AI abetted it. Apart from irrational exuberance, it also fuelled irrational expectations- however, most end users cannot realise that machine learning is an interesting confluence of mathematics and statistics. If you have garbage in, it cannot radically transform data.
At the heart of these problems is a lack of good economic analysis, analysis that can guide the nation toward better designs and more productive innovations. My hope is that this discussion will help decision-makers—from individual investors to national policy leaders—recognize hype, avoid its negative effects, and evaluate the economic promise of emerging technologies in more realistic ways.
I have emphasized these statements from the author- the returns on investment from the “idea funnel” are missing. Agreed that driverless cars will affect the society, but to what goal? How can a mobility company ( a taxi hailing service), impact “humanity”? Those are lofty statements (and represents a woke liberalism) because the end goal is unclear. It is surprising that investor dollars continue to subsidize ride hailing platforms to no avail. They don’t represent innovation because it is a service layer- they have only added a layer of convenience (and meanwhile, the local municipalities loose on the most valuable local mapping and traffic patterns for a reverse feedback loop in improving utilities).
Unless there is a clear economic model for a “startup”, it is futile to throw in good money at customer acquisition. It wouldn’t stop a copy cat “innovator” to fuel indebtedness and pile on a higher risk.