Cognitive technologies with David Schatsky at Blocks + Bots

Exploring opportunities in cognitive technologies

November 2015

Agenda

What is AI? What are cognitive technologies?

Focus on machine learning The catalysts of progress Types of applications Investment and trends Where and whether to apply these technologies Cog tech, automation, and work Conclusion

What is artificial intelligence?DEFINING AI

“… may lack an agreed-upon definition” − AI pioneer Nils Nilsson1

Leading AI textbook offers 8 definitions2

1 Nils Nilsson, The Quest for Artificial Intelligence2 Stuart Russell and Peter Norvig, Artificial Intelligence

A useful definition of AIDEFINING AI

The theory and development of computer systems able to perform tasks that normally require human intelligence.

The AI EffectDEFINING AI

“As soon as it works, no one calls it AI anymore.”1

“AI is whatever hasn’t been done yet.”2

1 John McCarthy, quoted in Bostrom2 Attributed to Larry Tesler in Douglas R. Hofstadter, Godel, Escher, Bach: An Eternal Golden Braid

Cognitive technologies

Cognitive technologies simulate perceptual and cognitive skills to perform tasks only humans used to be able to do

Cognitive technologies

Such as

Demystifying artificial intelligence: The real opportunities for cognitive technologies in business

Supervised learning

Supervised learning is like learning by example“Learning a model from labeled training data”

Used for• Classification - output is

one of set of discrete values (e.g. spam, not spam)

• Regression - output is a number (e.g., a price) - prediction

Source: http://faculty.chicagobooth.edu/drew.creal/teaching/basiccoursematerial/lectures/lecture9.pdf


Unsupervised learning

Learning by discovering patterns – “There are two types of people ….”

Applications - customer segmentation, product basket discovery, topic analysis


Reinforcement learning

Learning by trial and error – how a baby learns to crawl

Rights:https://pixabay.com/en/baby-crawling-child-infant-shadow-147416/

Applications:- Mechanical control - elevators, robots- Game playing

Catalysts of progress in AI

Moore’s law benefited all types of computingCATALYSTS OF PROGRESS

Current generation of microprocessors are 4,000,000X more powerful than first single-chip microprocessor of 19711

1 Andrew Danowitz et al., “CPU DB: Recording microprocessor history,” ACMQueue, volume 10, issue 4 (April 6, 2014), http://queue.acm.org/detail.cfm?id=2181798, accessed October 11, 2014.

Big data and new techniques advance work in AICATALYSTS OF PROGRESS

• Volume of data doubles every 2 years1

• 44 trillion gigabytes annually by 20202

• New techniques for managing and analyzing data

• AI models improved with “training”

1, 2 IDC 2014, http://www.emc.com/leadership/digital-universe/2014iview/executive-summary.htm

Internet and cloud support AI with access to big data and collaborators

CATALYSTS OF PROGRESS

Access to vast data resourcesCrowd-sourcing to train machine learning modelsImplicit collaboration, e.g., Web search, translation

Advances in algorithms broke performance barriers

CATALYSTS OF PROGRESS

New algorithms dramatically improve performance of machine learning

Over 500,000 scholarly papers on neural networks since 20061

New distributed computing breakthroughs

1 Google Scholar

Performance is improving…continually

Facial recognition: 2014: 97% accuracy (Facebook)1; 2015: 100% accuracy (Google)2

Google speech recognition:2013: 23% error rate2015: 8% error rate3

IBM Watson2400% smarter than when it won Jeopardy!4

1 Facebook, “DeepFace: Closing the gap to human-level performance in face verification,” https://www.facebook.com/publications/546316888800776/, accessed October 3, 2014; 2 http://www.cs.toronto.edu/~ranzato/publications/taigman_cvpr14.pdf; 3 Jordan Novet, Venture Beat, “Google says its speech recognition technology now has only an 8% word error rate,” May 28, 2015, http://venturebeat.com/2015/05/28/google-says-its-speech-recognition-technology-now-has-only-an-8-word-error-rate/, accessed September 16, 2015; 4 IBM, “IBM Watson,” http://www-03.ibm.com/press/us/en/presskit/27297.wss, accessed October 3, 2014.

https://www.facebook.com/publications/546316888800776/

http://www-03.ibm.com/press/us/en/presskit/27297.wss


Three main applications of cognitive technologies: Product, process and insight


Product: Embedding cognitive technologies in a product or service

Embed cognitive technologies to help increase the value of products or services by making them more effective, convenient, safer, faster, distinctive, or otherwise more valuable.

eBayNetflix

GM Domino’s Pizza

AudiVuCOMP


Process: automate tasks or processes humans used to do

Using computer systems to do work that people used to do. The work gets done faster, cheaper, better, or some combination of the three. Organization benefits.

Automate scheduling engineering works

Clinical trials eligibility

Process handwritten forms


Insight: Discerning patterns, making predictions, to improve operations or guide strategy

Generate insights that can help reduce costs, improve efficiency, increase revenues, improve effectiveness, or enhance customer service• Intel• BBVA Compass• Aetna


New applications of machine learning daily

Public sector• Smartphone app to reduce urban congestion• Flag parking abuses• Detect misbehavior by prisonersAutomotive• Detected driver absent-mindednessEnterprise information management• Classify and route business documents• Setting rules for accessing and manipulating

documentsHealth• Detect signs of gambling addiction• Predict cancer remission or drug resistance• Drug discovery• Predict development of psychosis• Predict air pollution days in advanceSales• Predicting which deals will close

Announced in the last few months

Billions in investment capital aimed mostly at traditional business problems and industries

Supporting Technologies

Rethinking Humans / HCI

Core Technologies

Rethinking Industries

Rethinking Enterprise

$281,293,137.0

$855,050,003.0

$1,037,431,892.0

$2,000,530,027.0

$2,464,000,488.0

VC investment in cognitive technology companies that have raised at least $10M, (Jan. 2011 – Sep. 2015, US only)

Commercialization and improving performance expand applications

Improving performance and commercialization fueled by surging investment expand the applications for cognitive technologies

GRAPHIC: DELOITTE UNIVERSITY PRESS

Applications are broadening

As performance improves, applications of speech recognition, computer vision, natural language processing and understanding are growing

conclusion


Deciding where to apply cognitive technologies in an organization


Viable: Where is it possible to apply cognitive technologies

Types of tasks ExamplesPerceptual tasks involving vision, speech, reading handwriting

Forms processing, first-tier customer service, warehouse operation

Analytical tasks, involving large data sets

Document review; finding patterns, making predictions

Decision-making tasks where expertise can be expressed as rules

Planning maintenance operations

Planning tasks in a constrained domain

Scheduling


Valuable: Where it is worth applying cognitive technologies

It may be worth using cognitive technologies where• Workers’ cognitive abilities or training are

underutilized• Business process has high labor costs• The value of improved performance is high

Opportunities ExamplesWorker’s cognitive abilities or training are under utilized

Writing company earnings reports; e-discovery

Business process has high labor costs

Medical utilization management

Expertise is scarce Medical diagnosis—especially rare conditions

Value of improved performance high

Decision-making in financial services

Create new features customers care about

Natural interfaces, automation, “intelligence”


Consumer benefits of cognitive technologies

Anupam Narula, David Schatsky, Ben Stiller, & Robert Libbey, "The thinker and the shopper: Four ways cognitive technologies can add value to consumer products," Deloitte University Press (June 3, 2015)


Vital: Where it is necessary to apply cognitive technologies

It may be necessary to use cognitive technologies where• Industry-standard performance requires it

(e.g. Online retail product recommendations)• Cannot scale relying on human labor alone

(e.g. media sentiment analysis, fraud detection)

Types of tasks ExamplesIndustry-standard performance requires cognitive tech

Online retail product recommendations

Service cannot scale relying on human labor alone

Fraud detection; social media sentiment analysis


The unintended consequences of automation http://en.wikipedia.org/wiki/Automatic_control#/media/File:Control_room_pt_tupper.jpg

People are flawed; automated systems can have flaws too

Humans are bad at monitoring automated processes—paying attention to things that hardly change

People lose skills if they don’t practice them—the autopilot irony

Cognitive “underload” can reduce performance

Automated systems can undermine worker motivation, cause alienation, and reduce satisfaction, productivity, and innovation

Ill-conceived automation strategies may diminish our sense of self-worth


What to automate, and to what extent?

High 10. The computer decides everything, acts autonomously, ignoring the human,

9. informs the human only if it, the computer, decides to

8. informs the human only if asked, or

7. executes automatically, then necessarily informs the human, and

6. allows the human a restricted time to veto before automatic execution, or

5. executes that suggestion if the human approves, or

4. suggests one alternative

3. narrows the selection down to a few, or

2. the computer offers a complete set of decision/action alternatives, or

Low 1. the computer offers no assistance: humans take all decisions and actions

Information acquisition

Information analysis

Decision and action selection

Action implementation

Adapted from: Raja Parasuraman et al., “A Model for Types and Levels of Human Interaction with Automation,” IEEE Transactions on Systems, Man, and Cybernetics 30, no. 3 (2000): 286–297.


Organizations have automation choices

Automation approach What is automated Examples

Replace Everything ATM; first-tier customer support

Atomize/automate As much as possible Machine translation plus human cleanup

Relieve Dull, dirty, or dangerous jobs

Routine earnings stories at AP; caller authentication at Barclays

Empower What wasn’t even being done before

IBM Watson for Oncology; oil & gas drilling problem resolution


Maximizing the value of workers and machines

Besides automation choices, organizations must choose between a cost strategy and a value strategy

A cost strategy uses technology to reduce costs, especially by reducing labor

A value strategy aims to increase value by complementing labor with technology or reassigning labor to higher-value work


Automation choices under different strategiesNEITHER THE TASK NOR THE TECHNOLOGY DICTATE THE STRATEGY TO BE FOLLOWED

Automation Choice

Cost strategy Value strategy

Replace Eliminate worker Reassign worker; use tech to provide superior performance

Atomize/ automate

Accelerate work, reduce staff, possibly alienate creative workers and artisans

Create new low-cost offers, employ lower-skilled, less-experienced workers

Relieve Eliminate routine tasks, increase productivity, reduce staff

Redeploy people to higher-value tasks; create more value for customers

Empower Increase performance of workers Increase workers’ performance and use to enhance their skills


Some skills will become more valuableTAKING A FRESH LOOK AT WHAT SKILLS WILL BE NEEDED

TASKS THAT CANNOT BE SUBSTITUTED BY COMPUTERIZATION ARE GENERALLY COMPLEMENTED BY IT.

TECHNOLOGY INCREASES PRODUCTIVITY, RAISES EARNINGS, AND AUGMENTS DEMAND FOR SKILLED LABOR

THE SKILLS REQUIRED FOR ROUTINE WORK TO BECOME LESS VALUABLE

THE SKILLS REQUIRED TO PERFORM BROADLY-DEFINED JOBS AND THOSE REQUIRED FOR SUCCESSFUL INTERPERSONAL

INTERACTIONS TO BECOME RELATIVELY MORE VALUABLE:

Flexibility General problem solving

Creativity Tolerance of ambiguity

Empathy Drive

Emotional intelligence Resourcefulness

Critical thinking Openness to serendipity


Organizations must plan for cognitive technologiesTHERE ARE CHOICES TO BE MADE

COGNITIVE TECHNOLOGIES WILL CHANGE THE EMPLOYMENT LANDSCAPE IN THE COMING YEARS

SOME JOBS WILL DISAPPEAR; OTHERS WILL BE REDESIGNED; NEW KINDS OF WORK WILL ARISE

WORKERS WHOSE SKILLS ARE COMPLEMENTED BY COGNITIVE TECHNOLOGIES WILL THRIVE; THOSE WHOSE SKILLS ARE BEING SUPPLANTED BY SMART MACHINES MAY STRUGGLE

LEADERS FACE CHOICES ABOUT HOW TO APPLY COGNITIVE TECHNOLOGIES:

• WILL THEIR WORKERS BE MARGINALIZED OR EMPOWERED?

• WILL THEIR ORGANIZATIONS USE THE TECHNOLOGY TO CREATE VALUE OR CUTTING COSTS?

TALENT STRATEGIES MUST START TO ACCOUNT FOR IMPACT OF COGNITIVE TECHNOLOGIES

Some take aways

Understand how these technologies enable new, better ways of working.Prepare to adopt when appropriate, or risk being sidelined.

Begin today to explore cognitive technologies

But killer robots are not around the cornerSomething new and important is happening

Their impact on business is increasingThe technologies are getting better

An opportunity to differentiateThe use of cognitive technologies can confer competitive advantage today. It will become table stakes tomorrow.

New online course on artificial intelligence and cognitive technologies

Free course. Register today:

http://novoed.com/cognitive-technology

Now available on:

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[email protected]: dschatsky

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