(By Mark Henricks)
“With some kinds of businesses, machines can play a larger role. For instance, many lending institutions rely heavily, if not completely, on computer algorithms to decide whether or not to make loans to human entrepreneurs. But for most other kinds of businesses, the need to understand and work effectively with people—investors, employees, customers, suppliers and other humans—would put an artificial entrepreneur at a significant disadvantage“.
You wouldn’t expect to beat a computer at chess, even if you were a chess master. But could you compete in business against a computer-led startup? Experts say you almost certainly could.
When it comes to business, the data-crunching prowess of even the most advanced self-learning artificial intelligence system still pales next to the human genius for innovating and inspiring. The artificial entrepreneur is yet to come, although something like it may already be on its way.
Recent improvements in learning-based algorithms and pattern-matching ability could theoretically enable artificially intelligent machines to stand in effectively for corporate executives in many functions, according to MIT professors Erik Brynjolfsson and Andrew McAfee, co-authors of The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. Computers today are the established substitutes of human pathologists looking for signs of disease, geologists seeking recoverable petroleum resources and law assistants poring over cases for legal loopholes. At the same time artificially intelligent cars are hitting the road sans driver and a Silicon Valley venture capital firm named an algorithm as a voting member of its board.
The Rise of the Machine
Clearly, artificial intelligence is skirting around the periphery of entrepreneurship. But can it ever penetrate to the core of what makes human entrepreneurs able to conceive and lead successful enterprises? Not everyone thinks so, at least not entirely, although much depends on how terms such as “entrepreneur” are defined.
“An entrepreneur sees opportunities in the market, gathers resources and applies those resources to take advantage of opportunity,” says Scott Klososky, the founder of Future Point of View, an Edmond, Oklahoma, technology strategy firm. Klososky believes the first of those steps is well within the capability of machines because it caters to computers’ strengths in sorting large amounts of data and quickly performing complex calculations. As Klososky says, “We could write a piece of software to map buying trends, and it could absolutely see opportunity.”
But the ability to assemble and apply the resources needed to exploit opportunity is very different. “That’s [where it] starts to get a little tough,” Klososky says. “Those resources are usually money, time and people. Could technology really put that together? The odds against that happening soon are probably much higher.”
With some kinds of businesses, machines can play a larger role. For instance, many lending institutions rely heavily, if not completely, on computer algorithms to decide whether or not to make loans to human entrepreneurs. But for most other kinds of businesses, the need to understand and work effectively with people—investors, employees, customers, suppliers and other humans—would put an artificial entrepreneur at a significant disadvantage.
“There are some decisions that will be hard for machines to make with no human at all,” Klososky says. In most cases, artificial intelligence would need to work alongside a human, much as the Pentagon foresees robotic jet fighters assisting pilots with specific tasks, such as landing on aircraft carriers.
If a totally automated entrepreneur ever comes along, it will likely be an online venture, where computers’ strengths will be maximized and weaknesses minimized. Mark Daoust, CEO of Quiet Light Brokerage, an Inver Grove Heights, Minnesota firm that specializes in selling online businesses, suggests it could develop first in foreign exchange trading, which operates in an environment rich in data and involving little if any human interaction. Foreign exchange trading systems already operate successfully under the control of highly complex, human-created rules, he says. The introduction of self-learning algorithms would be a step toward using true artificial intelligence in these fields. “I’d be shocked,” Daoust says, “if that’s not happening to some extent.”
It still doesn’t sound as if human judgment is being replaced with machine judgment, at least not completely. “A lot of companies are having decisions driven by data,” Daoust says. “I don’t know where you have that line between augmenting activity and taking over.”
Where the Future Lies
Should that line ever be crossed, Daoust says a successful human-free business could be exceptionally attractive to potential buyers. Many businesses are largely or completely dependent on the judgment, leadership and other critical skills of the founder, he says. That can make even very profitable enterprises hard to sell. Removing the requirement for a human entrepreneur would change that. “If you had a business that was fully augmented with artificial intelligence,” he says, “that would be extremely valuable.”
Daoust isn’t holding his breath, however. For all their talent at skills like chess and currency trading, artificially intelligent systems are still inadequate when it comes to working with other humans. McAfee agrees, noting that no technology to date has shown anything close to an adequate aptitude for negotiating deals, motivating humans or leading teams, all essential skills for business executives.
So it’s unlikely that the mysterious upstart competitor that’s creating turmoil in your industry is truly being led by a computer, no matter how ruthless its tactics may seem. At the same time, it’s clear that successful human entrepreneurs today are increasingly relying on technology to support their decisions about what business to go into and how to enter it.
The entrepreneur of the future may not be entirely artificial, but they are almost certainly not going to be entirely human.
“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”