The emerging 4th sector of the economy and a (tangential) AI arms race

ed fernandez
Mar 30, 2016 · 7 min read

Social & mission driven enterprises in the age of AI: mixing up two otherwise unrelated albeit mesmerizing topics.

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From the movie The Matrix Revolutions: Neo waiting to be interrogated by Agent Smith

Agent Smith Clone 1: It is purpose that created us.

Agent Smith Clone 2: Purpose that connects us.

Agent Smith Clone 3: Purpose that pulls us.

Agent Smith Clone 4: That guides us.

Agent Smith Clone 5: That drives us.

Agent Smith Clone 6: It is purpose that defines us.

Agent Smith Clone 7: Purpose that binds us.

Any entity & system exists for a reason, an objective to meet (even if only for dissipation purposes in the case of living organisms).

AI is no different in this respect, at least for the time being:

(a self-improving AI may eventually change its own scope of objectives developing some degree of self-control).

In the short term, narrow AI will be/has been pervasively spreading into all businesses and activities. This is an ongoing process, no news in here.

In the current economy, incentives are all in to support narrow AI development fostering efficiencies in every aspect of business, industry and vertical.

The inevitable search for profit or cost reduction will drive corporations to push narrow (and in the future general) AI based technologies to drive these efficiencies (i. e even replacement of workers, Brynjolfsson and McAfee 2011).

We’re coming to a point where Machine Learning and artificial intelligence is even being embedded at chipset level.

Short term (in the following 10–20 years), a clash of AI clans, an arms race for profit, will define how this technology will evolve, somehow a deterministic future.

A simple example are the all mighty everyday virtual voice assistants: Siri, Cortana, Google Now or Amazon Echo, fiercely compete for end users attention.

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While all of this happens and AI goes on making the headlines, the economic system is inconspicuously living a profound change as a consequence of shifting from a for-profit/self-interest into an altruistic model.

Non-for profit, social enterprises, public and government entities are all converging in what’s called the 4th sector of the economy.

These are the sharing & collaborative economies, driving low end disruption, extending on-line access to virtually any resource and democratizing prices for on-demand services (Uber-ization).

Sharing economy is an early precursor to the economy of abundance.

The 4th sector

Over the past few decades, the boundaries between the public (government), private (business), and social (non-profit) sectors have been blurring with many organizations pioneering and blending social and environmental aims with traditional business approaches.

There are many manifestations of this trend, such us corporate social responsibility, microfinance, venture philanthropy, sustainable businesses, social enterprise, privatization, community development and others. As these activities mature, this is becoming formalized as a ‘Fourth Sector’ of the economy.

The mission driven economy is based on a fundamental change in purpose.

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“Hybrid” entrepreneurs

They do operate today within the constraints of the other three existing sectors. Often requires them to compromise their objectives, complicate their organizational structures, and invent new processes that distract their focus and deplete resources.

The plain fact is that the infrastructures that have come into being to support the three main sectors are not ideal for these hybrid enterprises.

Despite this, many have grown and developed major corporations and global brands.

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Toms’ Shoes: the ‘one for one’ business model concept is an example of that. Toms’ offer blends footwear sales with donation, making the buyer a benefactor for impoverished children each time a pair of shoes is sold.

The company has given away more than 20M shoes, became a global brand with global presence and extended its businesses into other categories such as eyewear, bags and coffee.

Given its growth and notoriety, Toms is probably the poster child of ‘conscious capitalism’ of this decade.

The sharing & collaborative economy

Enabling an altruistic economic model

Uber-ization of the economy, the process of disrupting existing industries towards everything-as-a-service, creates enormous efficiencies leveraging technology, enabling availability of (otherwise idle) resources for on-demand services.

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At the same time, we are moving from a transactional, ownership based economy to a pay-per-use and subscription service economy.

It’s no longer about owning, but having convenient access to assets when needed or wanted. Even access to luxury is democratizing.

With the uber-ization of industries, prices move to a dynamic model, self-regulating with demand, which, again, leverage efficiencies to deliver better services at lower prices by enabling idle resources.

The sharing economy has already created $17 Bn companies, with 60.000 employees and 10 Unicorns (startups with value above $1Bn). This sector of the economy is poised to be a significant engine for resources and assets sharing. This is an early foundation for altruism-based services, core to the 4th sector activity.

As an example, imagine Uber drivers, who, once a week on some spare time could offer rides for free to moms and their children on their way to public libraries.

Or e-Bay giving away toys for free for children in Christmas, or Airbnb (real state owners), offering shelter for a week to people seeking jobs in a different city or country. Or Elance (freelancers) offering some spare time from teachers for people in need of education.

Many similar use cases are already happening at a relative small scale.

Dry cleaners in Portland offer their services for free to unemployed, and also in New York.

The sharing (or collaborative) economy is just enabling altruistic offerings at a bigger scale. This sector is thriving right at the crossroad between traditional economy and the non-for-profit & public sectors. The latest two now blending into the 4th sector.

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Handwritten notes from the plane, couldn’t find any well designed graph to express the idea, sorry

An afterthought

Considering the acceleration of globalization fostered by ubiquitous Internet access, mobile computing and social networks, now more than ever the world is starting to think and act globally.

A global world, with global altruistic interests, represented and manifested in the 4th sector of the economy will certainly leverage technologies and AI in particular for the greater good.

Oversimplifying this picture, we could think of for-profit; for-control AI oriented developments, relentlessly looking for better efficiencies vertically (traditional economy), coexisting with altruistic, mission driven AI entities at the other side of the spectrum, focused on solving global human problems and challenges (the 4th sector).

With the development of narrow AI in this context, a strong AI or AGI will emerge eventually. This is the moment when humanity, as we understand it, may be exposed and challenged.

Heavy development of narrow AI will lead to strong AI, eventually leading also to ‘bad’ AI or ‘misused’ AI in the same way other technologies were and are wrongfully used.

The 2004 Madrid train bombers, who killed 191 people and wounding 1,800, downloaded their bomb-making instructions from the Internet.

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After the 1995 Oklahoma City bombing, anonymous UseNet posts criticized the construction of the bomb, and offered suggestions on how to overcome the failure of the bomb to do its maximum intended damage.

Many scientists and personalities of our time like Hawking, Elon Musk or Wozniak have already taken steps towards bringing awareness to this issue.

To join these efforts, an open letter against autonomous AI powered weapons can be signed here.

Another afterthought

The 4th sector will definitively leverage new technologies and AI eventually for the benefit of humanity, and this is where history gives us hope:

The Apollo program was a public funded enterprise involving more than 400.000 talented individuals led by NASA with a common objective, to land a man on the moon.

It was the product of the Space race in the 20th century and left a technology legacy that has improved our lives in countless ways.

Reaching the moon or reaching AGI is a human race level task.

Even if posing risks or threats (nuclear power is another example), history proves the human race has done the right thing to preserve the species,

Richard Dawkins, in his book, the selfish gene, gave us all the clues about the meaning of life and the purpose of our existence. Preserving our species (by self-replication for now) remains our ultimate goal.

That goal leads us inexorably to space exploration and colonization (as the other scenario, facing extinction in a star system with a deadline, may not be ideal) and AGI is a major enabler as well as an earlier event to it.

We just need to get it right within this century.


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