Robert B. Cohen, PhD
Senior Fellow

Economic Strategy Institute 

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Robert B. Cohen, PhD, Senior Fellow, Economic Strategy Institute, March 15, 2018
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Changes in the Macro Economy and the Rise of Big Data

Previous analysis1 predicted that nearly half of U.S. jobs would be at risk of being displaced due to the automation of more routine skills. A shortcoming of this work was its inability to estimate how the introduction of digital processes and operations built upon innovative computing and software might have more complementary impacts on key parts of the economy. This analysis addresses this gap.

As firms’ operations rely in a much greater way on data analytics and data-insights and Big Data, more intelligent analytics and improvements in software development processes are becoming more central to the success of operations and a key determinant of competitiveness. Once there is wider use of machine learning (ML), artificial intelligence (AI), visualization and other tools for sophisticated analytics, the performance improvements achieved by this new focus on data are likely to be more apparent:

1. 1. Firms will need to analyze how new processes impact their operations. This will put a premium on their ability to capture and interpret data in “real time”.
2. Big Data will become indispensable. Firms’ now focus on sharpening their perception of what data are critical to business decisions, but this will reinforce it. They also will amass crucial data sets and to hire those with skills to manage and oversee them. Data and how it is harnessed will help determine a firm’s competitiveness.
3. To strengthen the benefits of data analysis, firms will redesign how they develop software to assess data and interpret the performance of processes. This will accelerate the deployment of more streamlined tools.

Robert B. Cohen, Ph.D., Senior Fellow, Economic Strategy Institute, May 11, 2018
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1. An Initial Estimate of the Impact of AI and ML on the U.S. economy

The impact of AI and ML on the economy is becoming clear through corporate presentations about how they are introducing these technologies. First, AI and ML will alter how firms operate and manage automation within their environments, whether that means manufacturing or services. Second, AI and ML will support a substantial evolution in software, infrastructure and computing for businesses, based largely on innovations in computing such as the move to Cloud Native (where no operating system is required on computers used to work in clouds). Part of this evolution includes virtualized infrastructure as well as the emergence of orchestration tools such as Kubernetes that accelerate the pace of application development. Third, with these enhancements, businesses can make more effective use of AI and ML applications to manage machines on the factory floor as well as support data analysis. They can also better manage human resources, supply chains, procurement, and other business functions.