The traditional Minds | Products | Core dynamic driving value creation is being rapidly superseded by Machines | Platforms | Crowd. Machines are getting smarter, powered by big data and pattern finding. Platforms facilitate transactions but don't make anything. The internet enables crowds to collectively outperform experts. This triple revolution of machines, platforms, and crowds creates opportunities. Successful companies will differently combine minds and machines to leverage automation, use platforms for efficient coordination, and tap the crowd's diverse talents. Incumbents must adapt to avoid disruption. Crowds can accomplish much with minimal central coordination thanks to enabling technologies. Established firms are finding novel ways to engage crowds, while crowd-based startups challenge them. Though technologies reduce production and coordination costs, companies will remain integral. The key is harnessing the digital future by taking advantage of the machine, platform, and crowd revolution. Change brings challenges but also possibilities for those who can capitalize on it.
Initially, machines had to be explicitly programmed with rules and knowledge. Today, machines can analyze vast datasets to detect subtle patterns beyond human perception. In this way, machines are rapidly advancing to outperform humans across many domains. The combination of human and machine intelligence will grow exponentially more powerful. When computers were first introduced into business, a logical division of labor emerged. Machines handled computation, record-keeping and data transmission while people made key decisions, exercised judgment, innovated, and interacted with customers. This partnership was sensible when hardware was limited. However, technology has transformed this dynamic. Highly capable enterprise systems have emerged, with exponentially improved computation power and access to massive datasets. Machines can now make superior data-driven decisions across a widening range of tasks, with the margin of superiority increasing yearly. The standard human-machine partnership no longer makes sense. Where companies once valued leaders' ability to predict the future, excellent firms now use iteration, experimentation and customer analysis to invent the future. They take small steps, gather feedback, and leverage data to build what customers want. Nowhere is technological progress clearer than in artificial intelligence (AI). Initially rule-based, AI now excels at pattern recognition across huge datasets. With supervised learning, machines are given questions and answers to find new examples, compensating for inferior unsupervised learning. The results can be spectacular - Google used machine learning to cut data center energy use by 40% and overheads by 15%, saving tens of millions of dollars. APIs and cloud computing have enabled machine learning diffusion across industries. With appropriate data and algorithms, AI systems can rapidly spread throughout the global economy. While still inferior at empathy, leadership and creativity, machines' analytical abilities unlock human potential. We are entering a new era of productive collaboration between minds and machines.
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