Monday, 8 February 2016

Future of Information: the Good, Bad and Ugly of it

We are certainly at the cusp of a big revolution in the human civilisation - caused by the Information Technology and Machine Intelligence. There are golden moments in the history that have fundamentally changed us: late dark ages for the Astronomy, early renaissance for Physics, 1700-1800s for the Chemistry, late 1800s for the Microbiology, 1950s for the transistors… and the periods get more and more compressed. It looks like a labyrinth where it gets narrower when you get closer to its centre.

Without speculating on what the centre could look like, and considering this could be still a flat line of constant progress, we need to start thinking what the future could look like  - not because it is fun, but because an action could be warranted now. There is no shortage of speculation or commentary, one man can dream, and fathom a far future which might or might not be close to the distant reality. And that is not the point. The point is, as I will outline below, it could be getting late to do what we need to DO. Yes, this is not a sci-fi story…

On one hand, there is nothing new under the sun, and the cycle of change has always been with the mankind since the beginning. We always had the reluctant establishment fighting with the wind of change promoted by the new generation.

Figure 1 - Accelerating change [Source: Wikipedia]

On the other hand, this is the first time in the history that the cycle of change has been reduced to less than a generation (a generation is normally considered 20-25 years). You see, the politicians of the past had time to grow up with the changes, feel the needs, brew new ideas and come up with the solutions. Likewise, the nations have had the time to assimilate and react to the changes in terms of aspirations, occupation and direction as the new changes would not be fully in effect during the one person’s lifetime. What about now? Only a decade ago (pre-iPhone) looks like a century backwards. The cycle of change already looks like to be around 5-10 years [see Figure 1]. And look at our politicians: it is not a coincidence someone like Trump can capture the imagination of a nation in the lack of visionary contenders. The politics as we know it has reached the end of life - IMHO due to lack of serious left-wing ideas - but that is not the topic of this post. The point I am trying to make is politicians are no longer able to propose but the most trivial changes since their view of the world is limited by their lack of understanding of a whole new virtual world being created alongside this physical world whose rules do not exist in any books.

And it is not just the politics that is dropping far behind. Economics in the face of fast cycle of change will be different too. First of all, today’s financial malaise experienced in many developed countries might still be around for years to come. In an age of Keynesian economy and central intervention characterised by low inflation, low growth and abundance of money printed by central banks, it seems the banks are no longer relevant. Current economy sometimes referred to as the Japanisation, which was spotted back in 2011 and 5 year on feels no different. And it is no coincidence that an IMF report finds decreasing efficiency of capital in Japanese Economy - that can be applied elsewhere. Looking at the value of bank stocks provides the glaring fact that they are remnants of institutions from the past. True, they are probably still financing mine and your mortgage but their importance as the cornerstone of development during the previous centuries is gone. Why? Because the importance of capital in a world where there is so much of it around without finding a suitable investment is overrated. With 10-yr US Bonds at around 1.8% and yield on 2-yr German bund at -0.5% (!), an investment with 2% annual return is a bargain. In fact today’s banking is characterised by piling up losses year on year (for example this and this). Looking at the Citigroup or Bank of America’s 10 year chart is another witness to the same decline. In an environment when money is cheap (Because of ZIRP), it cannot be the main driver in the business, as money (and hence banks) is not the scarce commodity anymore. See? We did not even have to mention bitcoin, blockchain or crowdfunding.

Figure 2 - Deutsche Bank Stock since year 2000 [Source: Yahoo Finance]
But beyond our myopic view of the economy focused on the current climate, there is a rhetoric looking at it from a different angle and far into the future, seeing the same pattern. In one interesting essay on Economics of the future, authors find an ever decreasing role for the capital. While mentioning the importance of the suitable labour (in terms of geek labour force, currently the scarcest resource resulting in companies not growing their full potential) could be helpful, it is evident that capital is no more an issue.

In essence what all this means is, if historically the banks as the institutions controlling capital had the upper hand, in the days to come it will be those controlling Information. The future of our civilisation will be surrounding the conflicts to control the Information, on one hand by the state, on the other by the institutions and finally by us and NGOs for the privacy.

The Good

Rate of data acquisition has been described as exponential. This has been mainly with regard to the virtual world and our surroundings but very soon it will be us. From our exact whereabouts to our blood pressure to various hormonal levels and perhaps our emotional status, all will be around very soon. A lot of this is already possible, also known as quantifying self. But it is only a matter of time for this to be for everyone.

It is not difficult to think what it can do to promote health and disease prevention. Even now those who suffer from heart arrhythmia carry devices that can defibrillate their heart if a deadly ventricular fibrillation occurs. The blood pressure, sugar level, various hormonal levels, and all sorts of measurable elements can be tracked. Cancerous cells can be detected in blood (and its source identified) well before it could grow and spread. The plaques in the blood vessels will be identified by the micro devices circulating and any serious stenosis can be identified. Clots in the heart or brain vessels (resulting in stroke) can be detected at the time of formation with a device releasing thrombolytic agents immediately alleviating the problem. Going for extra medical diagnosis could be very similar to how our cars are being serviced today: a device gets connected to the myriad of micro devices in your body and full picture of health status will be immediately visible to the medical staff. You could be walking on a road or in a car, witnessing a rare yet horrific accident (would there be accidents?) and the medical team would know whether you would suffer from PTSD and whether you would need certain therapies for it - they would know where you were and whether you witnessed the incident from your various measurements.

And of course, this is only the medical side. The way we work, entertain ourselves and interact with the outside world will be completely different. It is not very hard to imagine what it will be like: one cheesy way is to just take everything that you do at home and think of adding an automation/scheduling/verbal command to it. From making coffee, to checking information, to entertainment. But I will refrain from limiting your view by my imagination. What it is clear is that the presence and impact of the virtual world will be much more pronounced.

At the end of the day, it is all about the extra information coupled with machine intelligence.

The Bad

This section is not speculating on what it could look like. We can all go and read any of the dystopian books, many to choose from and could be like any or none.

But instead it is about simple reasoning: taking what we know, projecting the rate of change and looking at what we might get. It is very reasonable to think that machine intelligence will be at a point where it can reason very efficiently with a pretty good rate of success. And on the other hand, it is reasonable to think that there will be many many data points for every person. If we as humans can be represented as intelligent machines that turn data plus our characters into decisions, it is not silly to think that if our characters (historical data) known to the machines and the input perceived by us already available via the many many agents present in and around us, it is not unreasonable to think that the systems can estimate your decisions. So when you think of advertising, this gets really frightening since you would know pretty well what the reaction will be if you have enough information. And it is about, how much, how much money do you have to decide on…

You see, the fight for your disposable income (that part of your income that you can choose how to spend) could not be more fierce: it can make or break companies in the future. The future of advertising and the fight for this disposable income is what makes Eric Schmidt to come out and almost say there won’t be online privacy in the future:
"Some governments will consider it too risky to have thousands of anonymous, untraceable and unverified citizens - hidden people - they'll want to know who is associated with each online account... Within search results, information tied to verified online profiles will be ranked higher than content without... even the most fascinating content, if tied to an anonymous profile simply won't be seen because of its excessive low ranking." - The New Digital Age / page 33
And when you see how the top four companies have already moved into media industry, you get it. Your iPhone selects a handful of news items for you to see, Facebook controls your timeline, Amazon is a full-blown media company and Google controls youtube which has overtaken conventional media for the entertainment of the millennials. We must reiterate that none of these companies are by nature evil but when it is to choose between you and their income, it is natural that they will pick the latter. And guess what: they have what the state wants too.

Let’s revisit banking for a moment to clarify the point. Banks have what politicians need: capital to fund ever more expensive political campaigns. And the state has what the banks need: regulation or rather de-regulation which banks thought will help them prosper because they can enter the stock market’s casino with the high street bank deposits (which ironically has been the source of their losses). And above all, the state catches the banks if they fall, as it did in 2008. ECB uses its various funds (EFSF, ESM, etc) to keep the banks in Greece and Italy (and others, soon Germany?) afloat. And catches the stock market when they fall as it has constantly done by various QE measures, interest rate cuts, printing money, etc. In such a financial milieu, where there are cushions all along the path, there is no real risk anymore leading to irresponsible behaviour by the banks. And the party should never end, no wonder Obama could not move an inch towards bringing back some regulation. Heads of state’s financial institutions come from ex-CEOs of the likes of Goldman Sachs. This alliance of the state and banking has contributed to the growth of inequality (ultimately leading to modern slavery) and no wonder, state is not bothered, the state is made up of politicians in alliance with bankers and the bankers.

And what does it have to do with the future of information? Exactly the same thing can happen in the future, only with the state and heads of companies owning the information. If capital no longer holds the power and it is the information, then the alliance of state and info bosses will lead to the modern slavery. States control the legislations and information companies own private data and control the media: each one having what the other needs. 

The Ugly

Why ugly? Because we are already there, almost. First of all, the states have started gathering and controlling information. NSA is just an example. The states have started requesting companies owning the data to provide them. Legislations are under way to prevent effective encryption. This could all look harmless when we are busy checking out our twitter and facebook timelines, but I have already started to freak me out: companies are already started thinking and acting in this area. As we visited, Google's Eric Schmidt is portraying a future where anonymity has little value, either you agree or otherwise you need to speak out.

Going back to the politics, we do not have politicians or lawyers that have a correct understanding of the technology and its implications, and it is not their fault: they were not prepared for it. But soon, very soon, we will have heads of companies turning politicians. Very much like CEOs of the Goldman Sachs, and I do not mean it necessarily in a bad way, why? Because the power will be in the hands of the geeks and by the same token, we need strong oppositions, we need politicians among us to rise to the occasion and lead us safely into the future where we have meaningful legislations protecting our privacy while allowing safe data sharing. Problem is, we had 2500 years or so to think about democracy and government in the physical world (from the Greek and Roman philosophers to now) but we are confronted with a virtual world where the ethics and philosophy are not well-defined and do not quite map to the physical world we live in yet every lawmaker is trying to shoehorn it to the only thing they know about. Enough is enough.

But where do we start from? My point in this post/essay has been to ask the questions, I do not claim to have the answers. We have not yet explored the problems well enough to come up with the right answers... we need the help of think tanks, many of which I see rising amongst us.

We are surrounded by the questions whose answers (like all other aspects of our industry) tangled with so much of our personal opinions. When it comes to the court of law what doesn't matter is your or my opinion. Is Edwards Snowden a hero or a traitor? Was Julian Assange a visionary or an opportunist? What is ethical hacking, and how is it different from unethical, in fact could hacking ever be legitimate? Is Anonymous a bunch of criminals or a collection of selfless vigilantes working for the betterment of the virtual world in lack of a legal alternative? What is the right to privacy, and is there a right to be anonymous?

Needless to say, there could be some quick wins. I think defining privacy and data sharing is one of the key elements. One improvement could be turning small-print legal mumbo jumbo of the terms and conditions to bullet-wise fact sheets. Similar to “Key Fact Sheet” for mortgages where the APR and various fees are clearly defined, we can enforce a privacy fact sheet where the answers to questions such as “My anonymised/non-anonymised data might/might not be sold”, “I can ask for my records can be physically erased”, “My personal information can/cannot be given to third parties”, etc are clearly defined for non-technical consumers, as well as most of the rest of us who rarely read the terms and conditions.

Whatever the solutions, we need to start… now! And it could be already late.

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