The most powerful companies in the world all have algorithms at their core.
Starting with the financial industry, every vertical will be completely digitised, and controlled by valuable algorithms.
Algorithms are shrouded in mystery and power. Yet, they’re simply a process, or set of rules, to be followed in calculations - most often by a computer. Algorithms can be anything from a basic chocolate cake recipe to the code that recommends your shows on Netflix. Computers have increased the power of algorithms and now are at the centre of technology companies that dominate the Fortune 500.
Another group profiting from the power of algorithms is the finance
industry. It is reported algorithms are responsible for 70% of the
trades on Wall Street. They are designed to look for patterns and
automatically buy or sell billions of dollars in milliseconds. They
get smarter with every trade, redesigning their own equations based on
real time market feedback. In 2010, 9.5% of the stock market simply
vanished, and nobody has any idea how it happened. But, we can be
confident that algorithms were behind it.
Diagnosis by Algorithm
Google have algorithms set up to alert authorities when clusters of
people simultaneously search for symptoms of ill health. Governments
can then allocate and distribute resources, stockpiling antidotes in
specific locations in need.
Amazon: Revising Retail
Ask Amazon’s Personal Assistant, Alexa, to order office paper and the algorithm chooses the product. It’s this feature which will become one of the company’s most profitable because there isn’t a list of options offered to the customer, but instead, a single recommendation. This leaves Amazon to make purchase decisions for customers, pushing their own products for purchase.
This commercial power will inevitably lead to government regulation.
Soon, we’ll understand what algorithms are doing with our data before
we click accept. Translated into a language we can all understand,
it’ll show what data is being collected, if it is being
commercialised, and the key components that inform outcome.