MODEX keynote: McAfee stresses power of platforms and the crowd

The business rules and thinking of the industrial age won’t serve us well in the digital age, Andrew McAfee, co-founder and co-director of the Initiative on the Digital Economy, said at Tuesday’s keynote at the MODEX conference in Atlanta.

McAfee said the old rules of business put faith in the experience of senior leaders or “HiPPOs” (the “highest paid person’s opinion”) in making judgement calls, but explained that in the digital age, it’s the “geeks” who win out because they are using technology like artificial intelligence (AI) to empower machines to make complex decisions.

McAfee detailed how an AI engine has beaten the best human players of the game of “GO,” while a crowdsourced competition to analyze medical research generated AI-based tools whose conclusions beat out the best conclusions from researchers in the medical field. McAfee’s point: Don’t assume computers are only good at transactions; they can excel at complex judgements, something which could be applied to supply chains.

“We now have a new colleague [in AI] that is going to show us how much more is possible,” said McAfee.

McAfee also advised thinking in terms of how platforms drive value creation, rather than a strict product focus, pointing to the success Apple had when it opened up its iPhone to third-party app developers, quickly building a thriving ecosystem.

If companies can come with good platforms, build trust in those platforms with lightweight tools, leverage AI and tap into the power of the crowd, they will tend to beat out companies with belief in traditional business ideas like sticking with “core” competencies, a product focus, and limited notion of what computers can do. In this digital age, concluded McAfee, “the crowd is usually more capable than the core.”