Kurt Hahlbeck, who has spent his career in technology, met last year with Oliver Buechse of My Strategy Source and Mike Semmann of the Wisconsin Bankers Association with shared concerns about the fast pace of change in technology and its impact on business. Together, they co-founded a task force, Advancing AI Wisconsin. Hahlbeck sat down with Insight Editor Margaret LeBrun to talk about AAIW’s mission to sound the alarm that businesses must prepare now for AI, the internet of things and other technologies to thrive — and survive.
Insight: What are you talking about when you talk about AI?
Kurt Hahlbeck: Artificial intelligence is essentially trying to get computers to mimic human beings, such that a human can’t tell it’s a computer. Where AI is the farthest advanced is in pattern recognition, so anything that requires you to talk or share an image uses pattern recognition. Amazon’s Alexa is a perfect example.
We’re using AI more broadly because there are a number of interdependent technologies that feed into this. The internet of things, IOT, is about having sensors which collect a ton of data, and then use tools to ultimately mine that data and enable these artificially intelligent programs to behave. The next generation of wireless technology is 5G, which involves remotes that send data over to a cloud that can drive the behavior of a machine. The term AI is sort of the headline, because it’s the one that captures the public imagination. It’s in pop culture.
What spurred you and others to start Advancing AI Wisconsin?
My background is in computer science and business. After I worked for a couple of companies, I started my own technology management consulting and software engineering company with a partner, called Sycamore Group, based in Milwaukee and Appleton. We merged into Wipfli in 2002, and I left Wipfli in 2015.
Oliver Buechse (formerly with Associated Bank, now a consultant with My Strategy Source) and I had connected through an offshoot of New North, the Forum for Innovation. He had just come back from visits to Silicon Valley on the subject, and I had moderated a discussion at a conference about the potential impact of AI and other advanced technologies. We both got our eyes opened very wide to realize this stuff is a lot further along than any of us realized.
We have talked to the state hospital association, bankers, Wisconsin Manufacturers & Commerce, regional economic development groups, government, education. They all had some awareness but think of this as out there in the future. The Wisconsin Legislature held an informational hearing this spring, and we were asked to testify.
What’s your concern?
Our immediate concern is that we don’t hear anybody talking about this in Wisconsin. If you aren’t proactive about it, you’ll end up being on the receiving end of it. We are concerned for the well-being of this region.
It’s not a formal entity. We’re all volunteers. Our mission is to raise awareness, to start dialogue and collaboration among various interested stakeholders. We don’t have answers. We don’t peddle solutions. We want stakeholder groups, trade associations, industry and academic institutions and government to put this on their agenda, to examine what are the potential impacts and what this will mean for consumers, users, customers, etc. The lead time on this is years — and we want them to be thinking about it now. If they’re not, they won’t be prepared when others come in and disrupt them. We view ourselves as Paul Revere ringing the bell saying, “AI is coming!”
How will developments in artificial intelligence affect certain industries?
It’s affecting advertising, marketing and social media, obviously. In financial services, it will significantly disrupt the concept of an underwriter, whose job is to make decisions on probability and risk and the impact. That’s an algorithm. Computers do that far more effectively and cheaply and consistently than human beings do. We probably have tens of thousands of underwriters in this state working for insurance companies and banks — those jobs are highly at risk of being automated. These are $60,000 to $100,000 salaried jobs that have the potential to disappear in the next five to 10 years. What are we going to do with all those people? Are we going to teach them how to weld? I don’t think so.
The audit industry, CPA industry, audits and tax returns are algorithms — this will be disruptive to them. On the flip side, health care is extremely exciting because one of the biggest challenges is we don’t have care available where the patients are. We have the potential to make health care in rural areas much more available to people remotely.
Artificial intelligence freaks out a lot of people — especially when it comes to privacy.
Privacy is gone. We lost privacy on our financial transactions years ago when the government decided these three credit agencies could have access to everything. Now we’re losing privacy on a personal front. Your cell phone tracks everything about you, including your location. People like free games you can download on your phone; they think all they have to put up with is the advertising, but actually, it wants to know your location, have access to your photos and files, because it’s selling that information to advertisers, to ad brokers.
What should business owners do about this?
Oliver has come up with a great acronym: POP. It stands for purpose, opportunity and preparation. How do we POP the question of AI? As a business owner, I still need to understand my strategy, my purpose, what am I trying to do? Technology doesn’t come first, focus comes first. We still have to get very clear on our purpose. Then we can look at the opportunities that the technology can provide to achieve that purpose. Can it help us be more productive? Can it help us offer a unique customer experience or manage risk better? And then lastly, there’s the preparedness. Do we have the talent and skills to take advantage of it? Do we have the capital necessary? Do we have the time and the space to learn and to be proactive?
The good news is, you don’t need $1 million. You can make a series of $10,000 or $20,000 experiments to practice and to learn. I would advocate that far more effectively than your traditional large-capital expenditure that you’ll need 30 years to amortize. You need to experiment. This isn’t a one and done.