As Artificial Intelligence and Digital Currencies (like Bitcoin) seek to transform our lives, what effects will these new advances have on commerce and the world’s supply chains?
There’s a change happening on factory floors the world over, as robots and automation increasingly replace the manual (human) workforce of old.
With the recent innovations in artificial intelligence, will the supply chains of tomorrow be at the mercy of robotic overlords? If so, do we have anything to fear?
Elon Musk has previously aired his own warnings while giving a talk to students from Massachusetts Institute of Technology (MIT), saying:
“I think we should be very careful about artificial intelligence. If I had to guess at what our biggest existential threat is, it’s probably that. So we need to be very careful… I’m increasingly inclined to think that there should be some regulatory oversight, maybe at the national and international level, just to make sure that we don’t do something very foolish.”
Of course it’s perfectly natural to fear change. We must also be mindful that artificial intelligence is still very much evolving, and at this stage it’s an unknown quantity. There are some camps that fear the worst, that AI represents the destruction of mankind, with robots and humans embroiled in a bitter battle for survival. Flesh vs. circuits, the human condition vs. sentience…
Not so according to Mustafa Suleyman – Head of Applied AI at Google DeepMind, who instead believes that this modern intelligence will help tackle some of the biggest problems facing the world today (think access to clean water, financial inequality and stock market risks). Indeed, the work of DeepMind was something Wired Editor David Rowan touched on at Procurement Leaders’ London gathering earlier this year.
David told us how DeepMind had created a “generalised artificial intelligence” – the earliest example of which was able to not only play Space Invaders, but master it to become the best player in the world. While this demonstration is certainly impressive, how can it translate to real-world scenarios?
The answer lies in Big Data as DeepMind observed: “We have global information overload from overwhelming systems complexity – they’re so complex and interlinked it’s possible that the US financial crash in 2008-9 caused the Egyptian revolution” [a time of widespread corruption and a stagnant economy that led to a national bread shortage].
If all of this (Big) Data is just sitting around, waiting for consumption, then why shouldn’t we make it available to robots for analysis and dissemination?
A Calculated Risk
Indeed, the significance of Big Data has not gone unnoticed by procurement’s leading lights…
A 2010 paper entitled ‘Artificial intelligence in supply chain management: theory and applications’ reviewed the past record of success in AI applications to SCM and identifies the most fruitful areas of SCM in which to apply AI.
Similarly, author of Supply Chain Visability.com -Jonah Saint McIntire, observed: “In time, as new generations of the AI are deployed, something truly game changing will occur. This is because machine learning will cross human learning capabilities fairly slowly. Remember that intelligence is modular and, as a result, machines may exceed humans in some forms of learning while lagging in others. The real breakthrough occurs when all necessary forms of learning are dominated by AI rather than human intelligence.”
If AI can help us realise that we have a problem, why then should we be fearful of this new technological dawn?
John McAfee – infamous programmer and creator of the world’s first antivirus software, has long insisted “that if you are a ‘routine cognitive worker’ following instructions or doing a structured mental task,” then it is your job that’s most at risk from the inevitable rise of the machines…
Payments Are Going Digital Too…
Bitcoin is an online payment system that is perhaps more widely recognised as the first decentralised digital currency.
Supported by open source technology, Bitcoin is not owned or operated by one individual or organisation. It is free to use (apart from an optional transaction fee) and can reduce the costs of transactions for merchants compared to credit cards.
The technology behind it is referred to as ‘blockchain’. The blockchain records all the transactions in a publicly available ledger. The ledger keeps track of what users are spending, provides authentication and keeps track of where the currency is.
Safety In (Digital) Numbers
New electronic payment systems and virtual currencies are expected to make paper currency the horse and buggy of the 21st century.
In a report commissioned by HP, the Ponemon Institute has made a number of interesting finds. Its “Security & Compliance Trends in Innovative Electronic Payments” paper reveals that support for digital currencies and new electronic payment systems are perhaps stronger than originally thought. And while 79 per cent of the US organisations that took part in the research plan to adopt digital currencies, a key barrier to the adoption of innovative electronic payments remains. Namely: the issue of security.
While new payment models are evolving, the same security fundamentals for maximum protection in the underlying payment process are still needed. The most critical are one-time passwords or tokens, federated identity and authentication systems and multi-factor authentication.
There is also the perception that the pressure to quickly migrate to the use of innovative electronic payments is making it difficult to address the security and privacy issues.
Digital wallets (or e-wallets) are used to hold virtual currency – and high profile names in technology like Google and Apple already have solutions in place to drive the adaption rate.
In-fact belief is so strong that almost half (46 per cent) of respondents predict that virtual currencies will overtake paper currencies within the next five years.
Perhaps there’s some truth in this… we are increasingly looking to financial institutions and credit card companies to make the inroads needed to take such practices to the next level.
They’ll be the ones to create new approaches to the security and privacy of the electronic payment platform. These organisations are closer to the consumer experience with electronic payment systems and might have a greater incentive to innovate and improve both security and privacy.
Transparency In The Digital Age
Is it such a leap to suggest that Bitcoin technology has the ability to transform the future of digital payments and aid supply chain transparency?
We already know that it’s possible to adapt Blockchains to keep track of what is going into a product, who has handled it etc. Using an app or website, an individual could stand in a shop holding a piece of clothing and be able to trace it all the way back to the farm that supplied the cotton. The information could be used to highlight working practices on the farm, use of pesticides, Fairtrade considerations and more, leading to far greater transparency.
Tracing the supply chain through the use of a ‘product passport’, showing the change of ownership of items through the supply chain and highlighting each step in the process would ultimately help to facilitate an understanding of the transactions from end to end.
What do you make of this brave new world: is more time needed to fully realise the benefits (and drawbacks) of such innovations?