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August 27, 2007

"Super Crunchers" - Is Human Intuition being replaced by Automated Reasoning?

In his new book, "Super Crunchers," Ian Ayres, an econometrician and law professor at Yale, says that data mining is slowly replacing human judgment:

  • "...the replacement of expertise and intuition by objective, data-based decision making, made possible by a virtually inexhaustible supply of inexpensive information. Those who control and manipulate this data will be the masters of the new economic universe. Ayres calls them "Super Crunchers," which is also the title of his book..."

Ayres cites some interesting examples about cancelling airline flights, medical diagnoses, Netflix, and loan approvals:

  • "...Increasingly, jobs that used to call for independent judgment, especially about other people, are being routinized and dumbed down. Banks no longer care about a loan officer's assessment of whether a borrower is a good risk; everything they need to know is in the numbers..."

I think Ayres is almost "spot on", as my British friends like to say.  The information to make these automated decisions is becoming more and more widely available.  And data mining can help identify appropriate business rules. 

But the actual decision is made using an "engine", in real-time, not by the "mining" ahead of time.

Data mining isn't replacing the human reasoning or decision, the inference engine is. Of course, today the inference engine is better known as the business rules engine or the decision engine. We could also call it the "automated reeasoning engine".

Rule engines are the way to go for deployment of these automated decisions or automated reasoning. That's the right technology to implement or execute the micro-decisions and macro-decisions that data mining has uncovered.

See the rest of the story by Jerry Adler in the Sept 3, 2007 issue of Newsweek.

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