Can Artificial Intelligence determine the demand function?

Today is the last day of Mobile World Congress, at least for me because I will be flying back to Istanbul tomorrow at noon. I had the pleasure of spending quality time with opinion leaders from Africa, Europe, Asia, North and South America and Australia. Unfortunately, nothing beautiful lasts forever.

Yesterday, the meeting marathon that kicked off in the morning continued until late in the evening. Let me share with you what I learned. By the way, I haven’t forgotten about Fed Chair Powell’s speech at the US House of Representatives. So don’t worry you’ll read below my comments on that matter either.

First of all I might say that my convictions about the possibility that 5G (5th generation) infrastructure can be built using not only fibre optic cables but also through micro wave are getting stronger. It seems like this is the strongest B Plan anyway. In challenging geographic areas where copper wires are mostly used for communication infrastructures; a high-quality, uninterrupted and most importantly budget-friendly data transmission is required. I think it would be quite wise for Banking and Finance industries to focus on companies currently investing in such technologies.

“Multi-cloud and data security…”

80% of global organizations are expected to switch to multi-cloud architectures by 2020, which will bring more speed, more content and simplicity. But I can’t help myself asking, “How will we protect sensitive data?” There are two answers to this question. First, “As data will be transferred from one cloud to another via a specific verification mechanism, personal or corporate data will be protected under specific protocols”. Second, “protocols in applications we use will be designed to protect sensitive data from the very beginning”. These two answers I got actually seemed to me both right and wrong.

Because, I got the impression that sensitive personal data of a person using different municipal services, carrying out his business with government agencies, getting a check-up in a hospital, or a loan from a bank would run around within this multi-cloud environment. For instance, given the fact that the governmental mechanisms are always like, “Let me see too”, I am still not totally convinced that whether or not personal data will be protected properly. What will the user do when s/he will have to deal with an application asking him/her to share some of his/her personal information, which is blocked by some protocols in order to maintain data security? Your credit card details or a intimate selfie are not only things that are at stake here. We better not forget that.

But, the inevitable truth is that we are advancing towards automated multi-cloud environments. Obviously certain sacrifices will be required in order for this system can work fast and efficiently. After all, if you want to get in your car right away, which you left running when parked up, after paying your parking ticket on a rainy day, system must operate as fast as possible. The same goes for a student attending classes via distance-learning. S/he will need an uninterrupted and fast access. Let’s say you need to buy a ferry ticket while you’re going at high speed on highway, then your personal data will have to travel from one could to another almost at the speed of light.

While I was reflecting on all of this, snow started to fall around Barcelona. No, I’m not kidding. It was quite interesting to see rain and snow mixed while Barcelona International Convention Centre was hosting hundreds of thousands people. But, this obviously didn’t stop us from visiting Huawei’s stand in Hall 4, where we saw 4 brilliant innovations.

The first one was the most hype: Digital Sky Inıtiative, which is an initiative designed to develop the low airspace economy through advanced application of drones. These drones do not carry around people alone, they also save lives. And they have countless other features.

The second one was wireless technologies’ contributions to health industry, third one was a project focused on virtual and augmented reality. I put on a newly designed “space suit” in an enclosed space and walked on moon by collaborating with my teammates. In the process, I formed the following opinion: NASA should work harder to design better space suits, which are another component of the project. I would be lying if I said that everything I saw and did was VR. But, it was almost “real”.

The fourth and last project was a factory made of bands and machines interconnected through a wireless network. A normal factory today is managed by employees who has his/her own level of consciousness. But the AI will make Industry 4.0 more and more effective, thus suggesting “one consciousness, one intelligence”. Given that customer feedback is collected by the same artificial intelligence, this makes it possible to constantly produce in accordance with market demand for goods. To me, there is only one thing missing: “creativity” But I’m sure they got this covered too. That’s because factories/plants do not only manufacture/produce the goods and services of today, but also of tomorrow. I really don’t know if it would be possible for AI to exactly determine and identify what people will want in the future, because it doesn’t seem quite right to me if we are to use goods and services produced based on AI calculations. I’d like to find out your thoughts about the Demand Function may potentially managed by Artificial Intelligence.

In short, although I didn’t come across any satisfying approach to the problematic that the part human intelligence and digital touch will separately or collectively play a part in human world to what extent, MWC in Barcelona has given me the impression that we are moving at the speed of light towards artificial intelligence, Big Data and Cloud trio. When planning your future, always considers these three elements.

Now, let’s take a quick look at the markets, which do not admittedly seem as interesting as the things I mentioned earlier. The fact that Fed Chair Powell stated that Federal Reserve will continue to hike rates has resulted in a serious decline in Euro/Dollar parity. Many world stock exchanges, including Turkey, took a quick break from climbing up. Stock markets slide almost all around Europe, except Italy.

People might have thought that Powell would follow in Trump’s footsteps once he takes office. But, Fed officials have proved that they would stick to their usual path, which shows that the Fed and ultimately ECB will have to reduce their balance sheets sooner rather than later.

But, I don’t think they will take any step without considering market conditions. So, no need for unnecessary panic.

Prof. Dr. Emre Alkin