One man’s trash is another man’s treasure
Whether willing or not, people are increasingly divulging their personal information through Apps and mobile devices, which means that competitive advantages will accrue to companies that can best collect and use this data. Investors are facing an increasingly difficult ethical dilemma – should returns come at the cost of personal freedom?
It’s a sad truth that generation ‘i’ seems more than happy to give their personal data away. By way of example, AAMI has recently been in the news amidst concerns that data collected from its Safe Driver App could be provided to the police. The app records a driver’s journey with GPS technology, analysing the length of trips, speed, acceleration and phone usage. It will be a natural progression for AAMI to use this data to price personal policies; the good drivers will be rewarded, and the riskier drivers will have a clear incentive to improve their behaviour. But in return, the consumer has given away their personal freedom and some aspect of the choice.
People are still aghast when they discover that their personal data is being unwillingly collected, such as the latest revelation that smart televisions can record conversations of the viewer in the privacy of their home. But it’s likely that people will also become comfortable disclosing personal data that isn’t their own. I was recently invited to a meeting with a CEO of a major hospital in the United Kingdom. He predicts that children will be born with a complete genetic screen, allowing healthcare to be tailored from birth. The ethical and privacy concerns are certainly confronting – would you allow your child’s full genetic data to be uploaded to the cloud? While a parent may pause to consider the long-term ramifications, it would be difficult to ignore the instincts of keeping children from immediate harm.
Say goodbye to privacy, and then goodbye to personal freedom and choice. And if Stephen Hawking, Elon Musk and Bill Gates are to be believed, a threat to the human race. The movies Gattaca or Terminator might not be as far fetched as we thought when they were released. And yet investors’ search for value will most likely favour companies that control the data.
Ben MacNevin is an Analyst with Montgomery Investment Management. To invest with Montgomery, find out more.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
INVEST WITH MONTGOMERY
Paul Muscroft
:
Yes AI will first be a threat to our jobs – it wont be long Ben, before Roger pits you against a machine and asks you what else you bring to the table (wink) I read your link to the Samsung smart TV privacy policy and was blown away! Listening to conversations, facial recognition and constant data monitoring and for the benefit of who…. not the owner but the advertiser….Orwell’s telescreens are alive. And how secure is this public/private data being collected/streamed by these TV’s – I hope they’re not using them in the boardroom or CEO/CFO’s office.
Roger Montgomery
:
Frightening stuff that we click “agree” to.
Wayne A
:
Eugenics. Coming soon to a world like yours.
Roger Montgomery
:
Hi Wayne,
It’s already here; People aren’t selecting ‘blue eyes, blond curls’, but they are selecting ‘no predisposition’ to a variety of genetic ailments.
John E
:
It is quite surreal that many people divulging their personal details online, are actually much more conservative face to face. Technology provides a way for people to be exploited.
There is a lot of data matching going on behind the scenes to build profiles of people. I went to a seminar on this topic and the speaker was quite proud of the ‘customer intelligence’ data they had collated using data from social media, surveys and buying data from other companies. .
Roger Montgomery
:
Agreed John.
Andrew Legget
:
Wearable tech is going to be the next phase i think (actually it probably already is). The amount of data that your fitbit or apple watch could generate would be of great use to all sorts of companies regarding health, travel etc.
Your comment regarding Stephen Hawking, Bill Gates and Elon Musk’s fears about A.I is a conversation that i am happy to see happening as it is something that eneds to be considered.
My wife and I watched the movie Chappie over the weekend which i think did the topic well and points out the positive and negative side of A.I.
It wouldn’t have been all that long ago that we would think such thinking was out there but i believe that we are at a stage where the invention of a real A.I technology device which is able to learn, think and generate their own thoughts and ideas is an actual possibility and also in the near term future. The idea of technological singularity is an interesting one and something we need to consider.
Civilisation needs to decide if their is a point where we need to stop thinking about technological innovation due to the various unknowns that this will bring. It is counter intuitive because as a society we want to keep progressing.
In regards to companies using data, this is a battlefield that will continue to increase and as you say ben, competitive advantages will come from it. Some waste their data whilst others do it well, this could cause established players to see their market share erode quite quickly as well if they don’t adapt.
There are many questions that arise from this discussion from an investment standpoint as well. Currentyl the competitive advantage that humans have over machins (possibly the only one) is the ability to analyse qualitative data. Perhaps all of us that have done degrees in finance and learned to analyse stocks in the hope of doing it for a living might be wasting our time. Perhaps we could have robots with A.I that will be able to analyse quantitiative data in seconds whilst also having a better grasp of the qualitative side as well.
Roger Montgomery
:
Interesting to hear Wozniak say that he believes there are dangers in pursuing AI but “we should pursue it because it is about scientific exploring”. Even smart people can say some dangerous things. Remember; to a man with a hammer, every problem looks like a nail.