Adapting to the economy of algorithms

I recently read The Economy of Algorithms: AI and the Rise of the Digital Minions, by Marek Kowalkiewicz. It’s a light read that is mostly aimed at business leaders who are looking to adapt to our current age of increasing algorithmic automation (aka AI). However, some of the points are relevant to any human – especially to knowledge workers.

The main message of the book is that we’re experiencing an economic transition between three economies:

1. Economy of Corporations: What we had in the 20th century, with corporations being the most powerful entities.
2. Economy of People: Emerged in the early 21st century, with individuals gaining agency that has enabled us to compete with corporations (e.g., with YouTube influencers becoming more popular than some TV channels).
3. Economy of Algorithms: Starting in recent years, algorithms have been gaining agency and competing with people and corporations.

The emergence of a new economy doesn’t immediately obviate the previous economies, as Marek explains:

In the economy of algorithms, corporations can leverage advanced algorithms to optimise their operations, enhance decision-making and drive innovation, which increases their competitiveness and profitability. Individuals can harness the power of algorithms to develop new skills, create innovative products or services and participate in emerging markets that were once inaccessible to them. And, as you’ll soon find out, algorithms themselves – without active human or corporate control – can buy, sell, collect and invest funds, and perform other activities that were previously reserved for businesses and people.

The book includes a rich set of examples and stories that illustrate the above points. As everyone is wondering what to do in this period of accelerating change, Marek proposes nine rules for our age. These are grouped under three areas:

1. Be the minion master: Automate revenue generation
   • Automate relentlessly but mindfully
   • Build an army of digital minions
   • Empower your people
2. Be relentlessly curious: Evolve continuously
   • Launch new value propositions
   • Start a digital evolution
   • Stay curious
3. Be boldly optimistic: Saturate relationships with customers
   • Maximise customer value
   • Build digital ecosystems
   • Create a bold future

Marek calls corporations that do this well RACERS, which stands for Revenue Automation, Continuous Evolution, and Relationship Saturation.

While some rules only apply to business leaders, a few also apply to humans who are trying to remain economically relevant – especially the rules around embracing automation and evolving continuously. The alternative is to be made redundant. For example, I recently saw a job ad for a copywriter position that required both the ability to produce excellent copy without the aid of AI, and also the ability to produce excellent copy four times faster with AI tools. The same applies – explicitly or implicitly – to any knowledge work that can now be sped up with automation.