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Rotman Insights Hub | University of Toronto - Rotman School of Management

AI: the future is here

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Avi Goldfarb, Ajay Agrawal, Joshua Gans

The AI revolution is already here. According to Rotman professors Avi Goldfarb, Ajay Agrawal and Joshua Gans, who co-authored the hit business book Prediction Machines, AI is transforming the world around us. Consider innovations like facial recognition, when you type a word into your smart phone and the sentence completes itself.

Machine learning creates intelligence by finding patterns in data, improving our predictive power. Because it massively decreases the cost of prediction — and has wide application to most aspects of our lives — AI is already having a major impact on the world around us. 

Just as the steam engine replaced the horse and carriage, AI will replace those whose work depends on their cognitive labour. In other words, many jobs currently involving human-driven prediction will decline in demand. At the same time, work that complements automated prediction, and requires complicated — and very human skills — like initiative, judgment and leadership, will be more needed than ever. So far, at least, machines can't handle such responsibilities. 

For business, it's possible that the great AI disruption will bring more opportunities than losses. While machines can dramatically cut down on human error, for the prediction machines to do their best work, someone needs to ask the right questions and apply judgment. So for now, we humans are safe from being made redundant — if we get ready for this new world of smart machines.

Ajay Agrawal is the Geoffrey Taber chair in entrepreneurship and innovation and professor of entrepreneurship at the University of Toronto's Rotman School of Management where he conducts research on the economics of artificial intelligence, science policy, entrepreneurial finance, and geography of innovation. Professor Agrawal is a research associate at the National Bureau of Economic Research in Cambridge, MA, co-founder of The Next 36 and NextAI, and founder of the Creative Destruction Lab.
Joshua Gans holds the Jeffrey S. Skoll chair in technical innovation and entrepreneurship and is a professor at Rotman (with a cross-appointment in the department of economics). His research is primarily focused on understanding the economic drivers of innovation and scientific progress, and has core interests in digital strategy and antitrust policy. Joshua is the department editor (strategy) of Management Science, managing director of the Core Research consultancy and writes regularly for HBR and Digitopoly.
Avi Goldfarb is the Rotman chair in artificial intelligence and healthcare, and professor of marketing at Rotman. Avi is also chief data scientist at the Creative Destruction Lab, senior editor at Marketing Science, and a research associate at the National Bureau of Economic Research. His research on the economics of technology has been discussed in White House reports, congressional testimony, European Commission documents, the Economist, the Globe and Mail, the National Post, CBC Radio, National Public Radio, Forbes, the Atlantic, the New York Times, the Financial Times, the Wall Street Journal, and elsewhere. Along with Ajay Agrawal and Joshua Gans, Avi is the author of the Globe & Mail best-selling book Prediction Machines: The Simple Economics of Artificial Intelligence.