The algorithms that are taking over the world

The algorithms that are taking over the world

Posted by Pete Loughlin in Supply Chain 21 Nov 2011

I Robot is a collection of short stories by Isaac Asimov Published in 1950. They predict a day when robots will become sophisticated enough to begin to think for themselves and they explore the world where robots have the capability to take over the world.

And I was reminded of this when I wrote about bent bananas recently.

The algorithms that are taking over the world

Purchasing Insight logoIt’s happening already but it’s not robots. It’s more sinister than that. It’s the algorithms. Algorithms are beginning to rule the world. They dictate what we consume on the internet, they’re running our economies and they’re telling us what we like to eat.

An algorithm is just a bit of math – a formula, a model. There are algorithms that describe how gravity works in an on-line game. There are algorithms that describe what the weather will be like tomorrow based on what it’s like today and there are algorithms that deliver search results based on your search criteria. They’re not perfect, but as they become more complex and more accurate, we begin to rely on them. We begin to believe them and when that happens, they change. Instead of predicting what is likely to happen based on past experience, they dictate what is going to happen because we trust what they say and we react accordingly. Their predictions become self-fulfilling prophecies and because we take our hands off the helm, consequences that were never intended emerge.

The food retail industry utilizes sophisticated modeling using a wide range of data sources to ensure that store shelves remain fully stocked, that the stores are supplying things that people want to buy, that warehouses are positioned optimally to minimize logistics costs and that suppliers are ready and able respond to meet the needs of the end consumer at a price that suits them. They use point of sale data to measure what people are buying and they use focus groups and surveys to determine people’s preferences. This is why, in the West, all of our carrots are straight and bright orange. It’s why our potatoes are clean, perfectly shaped and bruise free. It’s why our apples are all the same size and our bananas are bent – but not too bent. And it also why 1.3 billion tonnes of food is going to waste in a world where 925 million people are starving.

According to a report by the Swedish Institute for Food and Biotechnology (Sik) issued earlier this year, industrialized and developing countries waste or lose over 1,300 m tonnes of food each year. While the wealthy countries waste food primarily at the level of the consumer, the dominant issue for developing countries is food weak infrastructure. As the Guardian reported early in 2011,  “poor storage, processing and packaging facilities that lack the capacity to keep produce fresh.” Half the world is dying for want of enough food and the other half is fighting an obesity epidemic. If this doesn’t disgust you, nothing will.

Over time, we’ve built our food supply chains using mathematical and economic models that are designed to maximize profit. That’s what supply chain people are supposed to do.  But take a step back and just look at the consequences. No –one planned this.

Is it time to dismantle the algorithms?

  • Cristian Balau December 2, 2011 at 1:59 am /

    I think it is. But we will need to dismantle the hole economic system as well for things to finally turn positive. How can we call it “economy” if the only goal of the “economy” is producing profit, even if that means WASTE…

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