Blog

INVESTING INSIGHTS
AT WILLIAM BLAIR

May 3, 2018 | Global Equity
AI: Lasting Limitations

Global Equity Strategist

Olga Bitel, partner, is a global strategist. She is responsible for economic research and analysis across all regions and sectors. She distills macroeconomic and geopolitical developments into actionable insights for global equity portfolios within a multifaceted strategic framework. In addition, she provides insights about cyclical turning points and structural trends as inputs into portfolio construction in predominantly bottom-up investment approaches. Before joining William Blair in 2009, Olga was a senior economist at the National Institute of Economic and Social Research in London, United Kingdom, where she produced macroeconomic forecasts for most Asian economies and led thematic research projects for some of the world’s best-known international organizations, including the Organization of the Petroleum Exporting Countries and the International Monetary Fund. Olga received a B.A. from the University of Chicago and an M.Sc. in economics from the London School of Economics and Political Science.

Print Friendly, PDF & Email

In an earlier post, I explained how artificial intelligence is disrupting existing business models, placing new demands on infrastructure, and even breaking down societal institutions. But as excited as I am about artificial intelligence, I do not want to overhype it. There are definitive and lasting limitations.

For example, machines trained to perform detail-specific tasks already perform better than humans. But their knowledge does not generalize. A machine may perform one task well, but that does not mean it will perform 10 other tasks well. There is something in the human brain that will not go away anytime soon.

“[Computers] are useless. They only give you answers.”
– Pablo Picasso

Pablo Picasso expressed it as, “[Computers] are useless. They only give you answers.” We do not believe that computers are useless, but agree that they cannot pose questions—and progress, throughout history, has been driven by questions—by people probing for the next exciting topic to explore. So entrepreneurs, innovators, scientists, and creators will continue to prosper.

Technology will simply help answer their questions and free them to begin asking new ones.

Robots also cannot replace human connection. You may have seen Sophia, the latest empathetic robot, in YouTube videos. Clearly, robots today can recognize the human state—whether we are happy or sad—increasingly well. But they can do little to change that state. We are a social species: we rely on others to motivate us, shame us, propel us forward. That, certainly, will remain in the purview of human endeavors.

U.S. retail, one of the first industries to be disrupted by artificial intelligence, provides a good example of how unlikely humans are to be replaced by machines is.

  1. Employment in U.S. retail is at a seven-decade high, as the chart below illustrates.
  2. Employment in e-commerce sectors—those supposedly dominated by artificial intelligence—is growing much faster than general retail.

  1. Despite rapid employment growth in e-commerce, we are also seeing significantly higher wage growth compared to general retail.

This suggests however mechanized a retail company is, it still relies on people, and these people are much more productive than they would be in the absence of the machines. Thus, machines will not make us redundant, but will enhance our capabilities and make us more productive.

Olga Bitel, partner, is a global strategist on William Blair’s Global Equity team.

 

Global Equity Strategist

Olga Bitel, partner, is a global strategist. She is responsible for economic research and analysis across all regions and sectors. She distills macroeconomic and geopolitical developments into actionable insights for global equity portfolios within a multifaceted strategic framework. In addition, she provides insights about cyclical turning points and structural trends as inputs into portfolio construction in predominantly bottom-up investment approaches. Before joining William Blair in 2009, Olga was a senior economist at the National Institute of Economic and Social Research in London, United Kingdom, where she produced macroeconomic forecasts for most Asian economies and led thematic research projects for some of the world’s best-known international organizations, including the Organization of the Petroleum Exporting Countries and the International Monetary Fund. Olga received a B.A. from the University of Chicago and an M.Sc. in economics from the London School of Economics and Political Science.

Related Posts

Subscribe to Our Blog

Gain insights about macro market events, the economy, and investing strategies. Choose your desired email alert (new post, weekly digest, or “A Step Ahead” only) to receive our latest blog posts straight to your inbox.

Left Menu Icon
 

Subscribe to Our Blog Now

Gain insights on macro market events, the economy, and investing strategies. Choose your desired email alert (new post, weekly digest, or "A Step Ahead" only) to receive our latest blog posts straight to your inbox.

SIGN UP