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Here's Why Automation Shouldn't Scare You to Death

Jan 13, 2017

In this issue:
» The new Tata Sons Chairman needs to shake up things on capital allocation front
» India corporate tax rate amongst the highest in the world
» ...and more!
00:00
Rahul Shah, Co-Head of Research

A puzzle is the last thing you want to solve while making an important online purchase. Especially when those wobbly, tangled characters are hard to decipher...

'Those puzzles are for your own good, Rahul,' a techie friend told me. Apparently, these puzzles, or CAPTCHAs as they're called, make sure a human and not a robot is accessing the site.

But given the cyber world's constant cat and mouse game between attackers and defenders, I assume even these CAPTCHAS can be fooled and hacked into.

A quick search on the net confirms my fears. CAPTCHAs can indeed be broken. But in that way, they're like the locks on our front doors. They don't 100% ensure nobody will break in, but they do provide adequate protection.

I am a little surprised how a little human ingenuity, a little creativity, can outfox the smartest of machines. Is an annoying little puzzle all it takes to put up a decent defense against robot hackers? Will machines ever really replace humans?

Chess legend Gary Kasparov doesn't think so. Yes, the man who lost to a machine and whose defeat was taken as a symbol of mankind's submission before the almighty computer...

Kasparov's views on his defeat were reiterated in a recent essay.

Rather than seeing it as black and white, he sees an opportunity to collaborate. For him, it was not man vs machine but man plus machine: 'In chess, as in so many things, what computers are good at is where humans are weak, and vice versa.'

Computers may seem to have an almost godlike perfection. But concerning the highest godlike attribute - creativity - there is a yawning gap between us and them.

So how about combining our complementary attributes?

Here's Kasparov again:

  • Having a computer partner also meant never having to worry about making a tactical blunder. The computer could project the consequences of each move we considered, pointing out possible outcomes and countermoves we might otherwise have missed. With that taken care of for us, we could concentrate on strategic planning instead of spending so much time on calculations.

Sapiens author Yuval Noah Harari puts it best when he says intelligence has been 'decoupled from consciousness' over the past few decades. Our brains are capable of both intelligence and consciousness. But computers have outpaced us in the intelligence department.

So a computer's intelligence and our conscious creative potential can be a winning combination.

Take my own job for example. My reliance on computers and on automated systems has gone up exponentially over the years. But computers can't find value in a market obscured by hype, misinformation, easy money, and irrational exuberance. Computers can't communicate in the language our readers understand.

I still have to explain our investing philosophy. I have to warn readers of an impending crash or encourage them to take advantage of a bull market. I have to offer perspective. These are all actions the smartest of computers are miles away from performing. And the big question is whether they will ever achieve consciousness at all.

Automation has been with us for ages. And it hasn't threatened mankind yet. Sure, some jobs have been lost along the way. But overall, automation has made us more productive and raised our standard of living.

I don't deny that the pace of automation will increase at a dizzying rate in the coming years. But to say it will render humans obsolete is, in my view, science fiction. Rather than rendering the other obsolete, the two can coexist. And rather than compete, the two can collaborate and create.

Let us know what you think.

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03:07 Chart of the Day

We always get the feeling that we're paying too much tax. And so do our companies. But how do our corporate tax rates really stack up against the rest of the world?

Today's chart of the day has the answer.

Indian Corporate Tax Rate Amongst Highest in the World


Our corporate tax rate stands at almost 35%, which is the second highest in the world. And the finance minister in his 2015 budget speeches did express an intent to bring the rate down.

That said, one must also note companies get a whole raft of exemptions that - as per government claims - brings the aggregate effective tax rate of India Inc. down to just 23%.

This being the case, as we look towards the upcoming Union Budget for 2017-18, what is the need of the hour is to get rid of the complicated layers of exemptions and to have a simple and uniform tax rate much lower than the current one. This will not only make for better tax compliance by companies, it will also make it easier for the tax department to administer appropriate tax collections as well as reduce tax litigation. Now wouldn't that be a huge shot in the arm for the 'ease of doing business' in India?

04:00

Ending weeks of speculation, yesterday Tata Sons finally named TCS CEO N. Chandrasekhar as its chairman. He will take over from current interim chairman Ratan Tata. Some feel that perhaps the top priority in the search for a chairman this time around would have been finding someone who doesn't rock the boat too much like predecessor Cyrus Mistry.

But perhaps another big consideration was how Chandrasekaran did a great job managing TCS. His management style has been one of decentralising power and giving managers of individual units a great deal of ownership in terms of achieving profitability and growth as if managing their own businesses. This may prove of use at the help of Tata Sons.

However, profitable capital allocation, something that has proved to be the Tata Group's Achilles heel over the past decade or so, will perhaps be his most formidable challenge. We hope he doesn't shy away from shaking up things in this regard.

04:43

The Indian stock markets were trading almost flat today on the back of mixed activity across index heavyweights. At the time of writing, the BSE-Sensex was trading down by around 30 points. Gains were largely seen in and stocks. Tata group stocks were seen at the losing end.

04:53

"The great lesson in microeconomics is to discriminate between when technology is going to help you and when it's going to kill you. And most people do not get this straight in their heads." - Charlie Munger

This edition of The 5 Minute WrapUp is authored by Rahul Shah (Research Analyst).

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5 Responses to "Here's Why Automation Shouldn't Scare You to Death"

parimal shah

Jan 14, 2017

Many thoughts have been shared in daily letters about start-up India, unemployment, & digitization creating a crisis in the making. I go with Kasparov. Make yougsters THINK CREATIVELY. This will make INdia the best IT hub in the world by combining both Man-creativity; and the beast-computers. Instead of being afraid, teenagers will try and find solutions. Start up India has to move in that direction.

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Ronnie

Jan 13, 2017

Hi, interesting subject, as an 80 plus year old I have watched computers develop within industry from the 60's ,where I witnessed 8 people controlling a huge sheet of red hot iron and 4 of those were were cleaners etc. I informed my mates working in another steel mill, those that took notice changed their work and thus no loss was suffered, the slow had no where to go, lesson 1 "Be aware of the consequences of a management decision" we apparently seem to have become "small section doers" and then pass the piece on to someone else abrogatting ourself from any further responsibility for the successful completion of the whole outcome planned for that product. There is no need for fault finding what is required is an awareness program where all involved are aware of the desired outcome of the project, I'm working with some SalVal people and their eyebrows raised when my thoughts were heard, what about you - Ronnie the Radical

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sundaravaradan S.

Jan 13, 2017

Hi,


"The great lesson in microeconomics is to discriminate between when technology is going to help you and when it's going to kill you. And most people do not get this straight in their heads." - Charlie Munger..
--
Both Tech & Humans can collaborate...!!!

Like 

sundaravaradan S.

Jan 13, 2017

Hi,


Should Automation scare Indians to DEATH....???

Let Mr vivek & Team know that Humans & Computers have ALWAYS been collaborating with each other. (Some Jobs are Lost; New Jobs created; Some converted).

Hakuna Matata....


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s.raghuram

Jan 13, 2017

Sure, computers and humans can collaborate for the benefit of man. Even so, simultaneously, there will be some human 'endeavour', with 'diabolic designs' to 'rig' the computer to the detriment of vast sections of people involving their personal safety, liberty and loss, perhaps their very day to day existence.Your column refers to ,attackers vs defenders'. Automation has to 'succeed and not precede' human need.

"The great lesson in microeconomics is to discriminate between when technology is going to help you and when it's going to kill you. And most people do not get this straight in their heads." - Charlie Munger

Use of technology aka computers applies not just to microeconomics .......

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