Prediction Machines

This book helped me understand why advances in artificial intelligence are going to have a big impact on productivity and economic growth. I loved the analogies to old technologies like electrification of factories, and newer examples like how Team New Zealand used simulations to change racing tactics and boat design.

The book has an important, big idea at its heart. That idea is that AI helps organizations make better predications, and those better predictions allow organizations to be fundamentally redesigned to take advantage of this. This is where the AI productivity revolution comes from.

This book lays out one of the most useful big-picture ways to put AI to use:  as a predictive tool. The central point of the book is that from a business/economic standpoint, AI increases accuracy and reduces the cost of making data-driven predictions. The benefit of reducing the cost of predicting in business is enormous and this book lays that out clearly. And the rest of it is focused on how that will affect the world around us. I recommend this book highly to any manager who is thinking through what AI means for their firm. The writing style is… show more.

In my experience, most of the books about AI and machine learning are written by people coming from a technical background. The thing I found refreshing about this book is that the authors are economists, not technologists. Therefore, they bring a somewhat different perspective to the subject. In particular, focusing on the fact that the foundation of almost all successful AI-based technologies is providing better ways to predict things of interest. This covers a huge range of applications from object recognition, to fraud prevention to strategic forecasting, and everything in between.