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"The forthcoming Artificial Intelligence (AI) revolution: Its impact on society and firms"

by Makridakis, Spyros (2017)


The impact of the industrial and digital (information) revolutions has, undoubtedly, been substantial on practically all aspects of our society, life, firms and employment. Will the forthcoming AI revolution produce similar, far-reaching effects? By examining analogous inventions of the industrial, digital and AI revolutions, this article claims that the latter is on target and that it would bring extensive changes that will also affect all aspects of our society and life. In addition, its impact on firms and employment will be considerable, resulting in richly interconnected organizations with decision making based on the analysis and exploitation of “big” data and intensified, global competition among firms. People will be capable of buying goods and obtaining services from anywhere in the world using the Internet, and exploiting the unlimited, additional benefits that will open through the widespread usage of AI inventions. The paper concludes that significant competitive advantages will continue to accrue to those utilizing the Internet widely and willing to take entrepreneurial risks in order to turn innovative products/services into worldwide commercial success stories. The greatest challenge facing societies and firms would be utilizing the benefits of availing AI technologies, providing vast opportunities for both new products/services and immense productivity improvements while avoiding the dangers and disadvantages in terms of increased unemployment and greater wealth inequalities.

Key Passage

The societal impact of the digital revolution has been significant as it has affected most aspects of our lives and work, having moulded the dominant firm, shaped our shopping and entertainment habits as well as our employment patterns. This paper argues that the AI revolution is on target and will come into full force within the next twenty years as did the digital one since 1995 and will probably have an even greater impact than both the Industrial and digital ones combined. What is uncertain is if such an impact will lead to a utopian or dystopian future, or somewhere in between, which according to the optimists will happen when some mutually beneficial coexistence is achieved by accepting our limitations and seeking ways to augment our own decision making abilities in a similar way that the world chess champion is now a human utilizing the help of a computer to determine his moves. The pessimists worry that when AI machines become smarter than us they will be making all our decisions for us, from the less important ones like SIRI or Cortana choosing a restaurant and ordering food and wine for their owners, to important ones like driving cars or managing nuclear plants. Pessimists are also concerned with social discontent as the amount of work available for people will diminish, and with the increasing wealth inequality between those employed or owning AI applications and the rest. (p.59)


Artificial Intelligence (Ai), Industrial Revolution, Digital Revolution, Ai Revolution



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