Are crowdsourced algorithms better than ‘old-fashioned’ decision making?

Andrew McAfee, author of “Machine, Platform, Crowd: Harnessing Our Digital Future”, raises some interesting points about AI

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“We should change the title of our book to ‘Business Advice We Shouldn’t Believe Any More’,” announced Andrew McAfee at a recent Intel event in New York City. The purpose of the gathering was to show, via a variety of spokespeople and experts, how data and AI are the future and, of course, prove Intel’s readiness for tomorrow.

McAfee, who is a principal research scientist at MIT, is focused on how technologies are changing business, the economy, and society. His latest book (written with Erik Brynjolfsson) is titled Machine, Platform, Crowd: Harnessing Our Digital Future, was released in hardback this June and looks at the big promise of crowdsourced AI.

“Businesses fail because they continue to read the business playbook,” he explained to the assembled group of B2B leaders. Most businesses still make their decisions based on the highest paid person’s opinion—the HiPPO. But these days the HiPPO “has a mortal enemy in the room: the geek” because this person doesn’t just use subjective judgement but hard numbers.

Machines appear to trump highly paid human experts

McAfee points to a paper, published in the year 2000 [“Clinical Versus Mechanical Prediction: A Meta-Analysis”] that, based on sample of 136, suggests that the majority of the time, experts are worse than useless. This is, of course, “very 2017” thinking for a number of reasons not least because of the new found ascendency of data.

In fact, the figures McAfee selects reveal that 48% of the time the HiPPOs added no value to decision making, 46% they actively made things worse and damningly concluded that they only offered better outcomes 6% of the time. “Why aren’t we making HiPPOs an endangered species?” he asked.

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