Is This the End of the Middleman?
September 20, 2017
The introduction of the internet began to reduce the need for professional intermediaries back in the 1990s, but that trend has accelerated with today’s AI capabilities. The Korea Times examines the matter in, “AI Invigorates ‘Scissors Economy’.” The term “scissors economy” harkens back to 1999’s Market Shock by Todd Buchholz, in which that author coined the phrase to describe the shrinking reliance on go-betweens prompted by online technologies.
Some of the businesses that have been affected by these changing circumstances included brick-and-mortar stores, travel agents, stockbrokers, and insurance agents. It should come as no surprise– technologies that give consumers more direct control necessarily abridge nearly any transaction, cutting out professional intercessors. Writer Yoon Sung-won observes:
Expectations are that the phenomenon of the scissors economy will gain more strength as industries expedite introducing AI technologies in actual businesses. For instance, financial institutions such as banks, brokerage houses and insurance companies have started to use AI-based technologies not just to recommend optimal financial products to their clients but also to make decisions such as whom to grant loans to and where to invest. In the process, less and less human intervention is needed. Online shopping malls are also rushing to adopt new type of services, also based on AI technologies. Upon the customers’ agreement, online shopping platform operators collect information on their preferences to recommend products for customers to purchase. Internet and gaming service providers also use AI technologies to analyze their users to understand consumption patterns. Advanced medical institutions such as cancer centers are also tapping into AI technologies. In Korea, multiple hospitals including Gachon University Gil Medical Center have introduced IBM’s Watson AI system to give medical advice.
Yoon cites an “industry source” when noting that not many workers have been directly replaced by AI systems yet, but that it is only a matter of time. We’re also cautioned—maybe those humans-in-the-middle are actually beneficial. What world will we create when we hand as much decision-making to algorithms as possible?
Cynthia Murrell, September 20, 2017
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