Wednesday, 01 April 2020

Living in a World of Algorithms

We Should “Get Smarter” about Automated Decision-Making
In a digital world, our decision-making is increasingly “automated”. “Algorithmically-driven” human choice is everywhere. And this is a “good thing”. But only if it is “done right”.

This is what I learned when teaching a class on creative thinking in Japan last week.

I have been thinking a lot about decision-making and technology. Japan always feels like the right place to be doing this. Technology and traditional culture seem to be so well-integrated here. And Japan is currently using technology to solve the many social problems of an ageing society.

My conclusion?

There are multiple benefits to be gained from “getting smarter” about algorithms, predictions and decision-making.

Algorithmic-Driven Choice

It seems obvious that our decisions are increasingly made together with technology. And when I say this, I mean all decisions. Not only business-related decisions at work, but also relatively trivial everyday life decisions.

Just stop and think about the influence that predictive algorithms have over our everyday lives.

How we make everyday decisions has been transformed by technology. A lot has been written about how Amazon and other online retailers have changed our shopping experience.

Such platforms are driven by algorithms or pre-defined formulas that are used to solve problems.

Recently, my microwave oven broke down. Suddenly and without warning.

I am the sort of person that depends on having a microwave. The chef of my wife’s restaurant will often prepare food for me to heat up when I get home in the evening and she is out working.

It was a Saturday when the machine broke. It was an old machine and purchasing a replacement was the only realistic option. But, I didn’t want to go downtown to make a purchase. The traffic would be awful, finding good parking would be difficult, and I have little confidence that my local consumer electronics retailer would have a good selection of microwaves.

So, I did what we all tend to do these days: I went online to look for a replacement. Via Google, I found an on-line supplier that would deliver by noon the following day (a Sunday) for no extra cost. A simple interface allowed me to select the category of product I wanted, and the performance features that I desired (size, functionality, price etc.).

Based on this information and an algorithm, a series of recommendations immediately came back. I compared the feature-sets, read the user reviews, “chose” the machine for me and made the purchase. The transaction was completed in a few minutes.

And the next day at around 11:00 AM, I became the proud owner of a brand-new microwave.

Think about what happened as five steps.

First, I communicated my personal “needs” to an easy-to-use online platform interface. Second, an algorithm curated and ranked the various options that met my criteria and the platform presented me with an individualized set of alternatives. Third, I considered the personal experience of other users, as the basis for my choice. Fourth, I made a selection and completed the transaction. Fifth, and finally, my data was integrated into the system to help personalize my future choices and those of other users with similar preferences.

-An online communication of needs.
-An algorithmic curation and ranking of options.
-An evaluation of options based on the experience of other users.
-The decision and transaction.
-The integration of relevant data back into the system for future use.

Students in my creative thinking class picked up on this. One student gave the example of GoBear, a South East Asian platform for purchasing insurance, credit cards or flight tickets. Again, it operated according to these five steps.

What is interesting is that, for the most part, we are satisfied and comfortable with this situation. Most of us are willing to trade “some” privacy in exchange for the convenience of “better” (that is to say, wider, deeper, more personalized) choice.

And one thing does seem very clear, to me at least: I am more satisfied by my microwave purchase compared to the “old-world” experience of dealing with traditional purchases at traditional retailers.

The influence of technology-driven choice over all aspects of our daily lives seems certain to continue.

The Critical View

Not everyone shares my positive view of this new world of algorithmically-driven choice.

When coming to Japan I have seen several pieces on Medium and elsewhere that express a more critical view about this type of algorithmically-powered decision-making.

For a start, there are concerns about privacy and the management of all of the data.

Others argue that our dependency on algorithms narrows our minds. Both individually and as a culture. Algorithmically-driven decisions makes us all “prisoners” of our previous choices and, as such, they stifle our capacity for personal development and growth. We can be blinded to the possibilities of the “new”.

Moreover, algorithmically-driven platforms can be gamed. There are many examples of people cheating the system for various reasons.

And, finally, we fall under the control of processes that most of us do not understand. After all, very few people understand how an algorithm actually operates.

I do see the point of these more critical views.

We do need a counter-balance given the power and reach of these technologies.

We need to be much smarter in how we engage with algorithmically-driven decision-making. Only by doing so, can we reap the benefits.

Here some preliminary thoughts about how we might do this. These throught came to me whilst discussing digital technologies in class.

Five Things You Should Know About Becoming a “Smarter” End-User of Algorithms

So, what should I tell my students? How can they become smarter “end-users” in an algorithm-driven world?

Understanding algorithms can be liberating

A bit of knowledge is a powerful thing. Being aware of how algorithmic-choice works — understanding how they structure our daily lives — may not “free them” in any deep sense, but it can make them smarter in how we engage with this technology. More knowledge about how algorithms operate can make them more savvy consumers of algorithms.

Understanding algorithms can control abuse, improve their operation & lead to “algorithm innovation”

More knowledge about algorithms can also help them contribute to debates on how to improve the performance of algorithms and to limit abuse. And this is in everyone’s best interests.

Understanding algorithms can help develop a personal “brand”

Algorithms are increasingly being used to make business decisions. Decisions that are made many times over with the “same” information and goals can easily be handed over to an algorithm. Recruitment is an obvious and important example.

In a world of where employer choices are algorithmically-driven. Everyone needs to be “smarter” in order to “get noticed”.

Getting an algorithm to “notice” you is definitely worth the investment of time. There are multiple strategies that can be employed and there are lots of resources out there providing practical guidance.

Understanding algorithms creates new business and work opportunities

Understanding algorithms also enables students to find new opportunities. More and more business models will be based on predictive formulas. It seems impossible to ignore this.

Finally, understanding algorithms preserves our individuality

I believe that creativity is the key here. My students have the opportunity to be smarter and to navigate the system.

And, just to be clear, I don’t mean gaming the system, which anyway will only become harder with further technological developments. But, I do mean a more creative engagement with the system.

It is this ability to create, to adapt and keep re-inventing ourselves that becomes crucial in maintaining our unique human identity in an automated and algorithmically-driven world.

As such, there is real value to be found in thinking about how to become better “end-users” of algorithms and technologies, and the benefits of being a smarter user.

By: Erik P.M Vermeulen
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