We must empower a more diversified economy in 2016


Austin Christmas Hat 1

Those of us growing up in the 1960s and 1970s experienced tumultuous times that had some similarities to the last decade. Among many other contributions from our generation—which include both positive and negative influences—were some great artists, one of whom Bob Dylan is featured in a massive IBM ad campaign. Dylan’s poetry is timeless and quite relevant today:

The post WW2 era we grew up in provided the best economic conditions the world has ever known. The baby boom population explosion, of which I am at the tail end of, combined with vast sequential gains in productivity to create the ‘miracles’ of economies in the U.S., Japan, Germany, and China among others, or so it seemed.

Although a few credible experts have warned all along that the world’s trajectory wasn’t sustainable, and perhaps most of us intuitively realized same, the financial crisis contained a potential silver lining in revealing the stark naked truth: much of that ‘success’ in the post war era came at the direct expense of the future, and the bills are coming due.

Although woefully deficient in ethics with poor visibility of systemic risk—even in cases where desire for prevention existed, master politicians and financial engineers in both the public and private sector have masked structural problems in the economy for decades—from the public and each other, by employing ever-more complex short-term remedies in a misguided game of musical chairs.

Unfortunately, the resolution of the financial crisis has consisted primarily of the very same type of financial engineering—it’s the only hammers central banks have in their toolbox. While central bankers are justified in pointing fingers at political and fiscal malfeasance, it’s up to humble citizens like me to hold up a mirror and suggest that they take a look to see that such malfeasance would not be possible if not empowered by monetary policy.

One certainty is that the super majority of consolidated malfeasance in much of the world has been transferred to the balance sheets of central banks and national debt at direct cost to billions of people, many of whom followed the rules, not least those who saved all their lives just as their public institutions recommended.  Those savings have been taxed for nearly a decade now by monetary policy rather than a democratic process; by devaluation of currency, record low (or negative) interest rates, inflation from asset bubbles such as commodities and housing, and the need for hundreds of millions to tap their principal for survival. Also certain is that regardless of whether or which stimulus measures were necessary, one outcome has been a dangerous expansion of the wealth gap now at record level in the modern era.

It’s very important to better understand that the previous wealth gap peak in the 1920s was partially causal to the Great Depression and WW2, among other earlier great revolutions and loss of life. Today’s billionaires seem to understand the moral hazard and potential for backlash, which is presumably one of the reasons for the philanthropic pledges. A nice gesture that will hopefully do much good, philanthropy is not an alternative for economic diversification, though can help if targeted for that purpose.

The financial crisis represents precisely how corrosive moral hazard is realized at dangerous levels that can reach critical mass, which could be triggered by unforeseen events.  Moral hazard is a psychological phenomenon, which occurs from regulatory, governance and policy failures that then combine with the ensuing economic weakness to cause the next crisis.  In this case the trigger was regulatory failure followed by heavy-handed resolution that caused massive collateral damage, further harming innocent citizens worldwide. In such cases where the non-virtuous (aka vicious) cycle is not interrupted by a moral realignment, typically through accountability by the justice system, strong credible governance, and adoption of new systems that punishes crimes and rewards beneficial behavior, then civilizations can and do rapidly decline.

In hindsight from a high level view, from a hopefully wiser former business consultant who has studied related phenomenon for decades now, it appears that we enjoyed a long period of one-off exploitations of planet and people combined with ever-increasing public debt and corruption supporting promises by politicians and institutions that were far beyond their means to deliver.

The bad news is that the combination of public debt and future liabilities tragically promised by politicians—and now expected—some portion of which is necessary to survive in the high cost modern economy caused by these policies, can’t possibly be paid by the current economy.

The good news is that not all of that massive spend on R&D over decades has gone to waste, and we now have much more accountable systems that can indeed prevent the super majority of future crises, if only we can muster the courage to adopt them. We are also seeing dramatic improvements in systems that have the capacity for exponential productivity growth over time, which is the only method in our current economic system to cover national debt, unfunded liabilities, and the needs of a quickly aging global population, given the immense future needs in healthcare, environment and economics.

So my plan for 2016 is to tap the exponentially decreased cost and performance improvement in computing hardware and algorithmics to extend our networked artificial intelligence system to the mid-market, NGOs, and governments to provide them with a world class system unavailable to anyone at any cost until very recently. My hope is that our Kyield OS will help even the playing field and lead to a more dynamic and robust economy of the type that is only possible with healthy balance of diversification. Soon thereafter we plan to do the same directly for small business and individuals.

“If your time to you is worth savin’
you better start swimmin’, or you’ll sink like a stone
For the times they are a-changin’”
– Bob Dylan

Why go to the Moon when what your company really needs is in the Rockies? (AI, Watson, Kyield)


Mark Betsy Austin on summit

Mark, Betsy & Austin on top of NM – 10-2015

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This post is in response to an excellent article Tom Davenport wrote for the WSJ (now on LinkedIn) ‘Lessons from the Cognitive Front Lines: Early Adopters of IBM’s Watson’.

Tom is a long-term advocate for increasing jobs related to analytics, particularly in the service sector, and is an advisor to Deloitte, which is a strong alliance partner with IBM, and Deloitte is a sponsor of WSJ CIO. Like most in our industry, we are in constant discussions, but as of now Kyield has no formal alliances or conflicts with any of the people or organizations mentioned in this article.

I too am an advocate for jobs, though not necessarily for IT incumbents, but rather for customers and the broader economy. Smaller companies create most jobs and most job losses come from incumbent consolidation, which is a credible place from which to start this discussion. I think Tom’s article and most of the related strategy is about protecting a few very specific jobs at Armonk, NY, and perhaps at a few alliance partners—not creating them for customers or the broader economy. Modern job creation is no mystery; it’s very well documented.

This article triggered a great many thoughts so I felt compelled to blog about it very early in the morning from my perch in Santa Fe, NM. You see I am the founder of a company called Kyield with an authentic invention based on a theory I developed in our small lab 20 years ago (yield management of knowledge), which looks and sounds increasingly like what Watson has been attempting to become over the last few years. Our company is self-funded almost entirely by me and my wife (well into 7 figures), and frankly I’m feeling just a bit over-exploited at the moment, so hang in there as I poke some fun at the expense of our esteemed colleagues on the east coast and hopefully share something valuable in the process.

Several very important clues and quotes were revealed in this article. I highly recommend reading it carefully as Tom is one of the most experienced and knowledgeable observers in related overlapping domains. First, let’s dissect the lessons the article shares with us including that only one of the organizations interviewed in the article was a customer of Watson, which was University of Texas MD Anderson Cancer Center (MDACC), three were a “partner/co-developer” or “Watson ecosystem partners”, and the undisclosed health insurance company’s relationship type was also not disclosed. Those of us enlightened on the complex relationships in enterprise IT will of course immediately wonder what the terms of these relationships are, who is paying for what, and most importantly why.

Some things we can confirm. IBM has disclosed a billion dollar investment in Watson, often claims to be betting the farm on Watson and/or the cloud, and is obviously spending enormous sums on marketing, partnerships and sales. I too have a lot riding on my company Kyield so IBM’s CEO Ginni and I share that in common—our jobs and future wealth are riding on our respective systems. IBM is constantly reminding us that Watson and healthcare in particular are “moon shots” for IBM, but I’m seriously beginning to wonder if this moon shot is a prudent business decision for IBM and its customers, or a science project that needs another two decades of R&D like we performed with Kyield before attempting to unleash it on customers—particularly business customers (more on basic vs. applied research in a minute).

In order to get our arms around this topic we need to understand a few of the business and technical issues, which for me dates back to the early 1980s to include discussions with IBM and most other industry leaders off and on the entire time. As you may be aware, IBM has been substantially dependent upon the high-end service model since the previous major transformation led by Lou Gerstner in the early 1990s.

What is less known is that IBM grew to over 400,000 employees in that model with more in India than in the U.S. While a brilliant turn-around model in Lou’s time that probably saved the company, 20+ years later the service model has in my view grown far beyond the means to pay for it, and become a big part of the problem in IT for customers and the macro economy. I think IBM understands this well, but it’s a slow and difficult transformation. Ginni herself often states in interviews the challenge is whether IBM “can make the transformation in time”. I suspect with some private confirmation that time may be growing short.

IBM is not alone. All system integrators and many IT consultants share this misalignment of interest challenge often discussed today regarding both internal and external IT investments. The IT services sector represents something like a third of the now almost $4 trillion global IT industry, but drives spending in the majority, which is one reason why the enterprise cloud market is exploding. We then need to understand that IBM’s quarterly revenue has been falling like a rock for several years and so too has the company’s value, during which time competitors like AWS are experiencing record rapid growth, which places a great deal of pressure on the company, partners and loyal customers, not to mention investors and employees. While I am empathetic with IBM’s challenge and especially employees, rest assured that whatever pressure IBM is under it cannot compare to a self-funded entrepreneur.

We have our challenges as well to include the fallout from IBM’s problem in the marketplace, not least of which is a massive ad spend and sales force, with a combined millions of individuals in shareholders, employees and partners all over the world clicking on articles about Watson, which just incentivizes publishers to write more articles with the keyword Watson. Unfortunately, all that attention and spending isn’t necessarily good for customers, the economy, or even IBM—in this regard I may have as much or more relevant experience in my background as our friends at IBM as the challenge to overcome such an advantage in small companies is substantially greater than defense in an incumbent.

The namesake Watson by the way was not a scientist, but a famous salesman who built the early IBM by going door to door selling machines—trust me I respect that, as well as IBM, and many I know and have known at the company. This may provide a clue however regarding the dual branding definition in the name Watson. Prior to becoming CEO of IBM, Ginni was SVP Sales, Marketing, and Strategy at IBM (I too am guilty as I was a CSO of smaller turn-around companies long before changing paths before Lou’s time).

Let’s talk technology

With business strategy, misalignment of interests, and potential business model conflicts out of the way, let’s now take a brief look at the science and technology involved with Watson, which like my company Kyield and our OS is based on AI—in fact my core patent was labeled an AI system by the USPTO. Ginni is stepping back from using the term AI now (“a small part of it”) presumably due to the fear of job displacement out there and other nonsense perpetuated by famous brands with all manner of agendas, which is certainly understandable. I’ve contributed to that learning curve myself over at Wired, but make no mistake Watson is AI even if most of the revenue may come from some other stream like system integration, solutions, and consulting.

While defining AI is not a perfect science, the consensus among scientists is that AI can be divided into two forms, which is extremely important to understand and directly relevant to almost everything discussed here and elsewhere on AI:

  1. General AI (AGI), which is also referred to by some leading AI scientists and authors who cover the field as ‘super intelligence’, or strong AI.
  2. Narrow AI, which is also called weak, narrow or applied AI.

Augmentation or enhancement is by extension applied AI as it is very narrow and highly specific, particularly in our case for each individual entity down to the molecular level when necessary (as in personalized healthcare). Kyield is without question one of the world’s competency leaders at the confluence of human and artificial intelligence, if not the leader.

Now let’s delve into the carefully structured quotes in Tom’s article to glean some additional intelligence.

“It’s an apprenticeship form of training that takes years—there are lots of subtleties that Watson has to learn,” said Dr. Kris at MSKCC.

This is inherent with any deep learning (DL) application including source code shared by researchers with the public and those in our system, but the challenge frankly has always been with system design, algorithmics, and hardware, not marketing. DL is now widely available for anyone who has the talent, providing a long-term benefit across all sectors, and certainly not dependent on Watson, Kyield or any other system. Rather it’s a function within the system. The difference with Kyield is that while DL is tapped for continuous learning over time, other critically important functionality in the basic core provides immediate value to customers, like increased productivity and crisis prevention.

It was not a trivial undertaking to design the Kyield OS in a simple to use fashion. I doubt that it would have been possible if funded by a conflicted organization of any kind, including the super majority of corporations, foundations or government R&D programs. We sacrificed to remain independent throughout the long voyage across the valley of death in large part to avoid such conflicts and be free to focus only on the needs of customers and the specific tasks at hand, not least of which is to prevent crises sourced within large organizations.

“But the problem comes when the needed knowledge isn’t in the corpus. Dr. Kris at MSKCC comments: We had three drugs approved in lung cancer this year. None of them are in the literature yet. And definitions of cancer and its variations are being redefined all the time as we understand the biological characteristics of each one. The science is changing more rapidly than the published literature.”

This is a good example of many specific types of intellectual obstacles we were forced to overcome early in our R&D, and the solution is frankly partially represented in our patented design. The complete solution also includes tradecraft and secrets to include expected future patents, and like IBM we are dependent on intellectual property for survival, so I can’t disclose further except to say that it was a very difficult and expensive problem to overcome; one deemed necessary prior to offering to customers.

“MDACC (UT MD Anderson Cancer Center) actually referred to its project as a moon shot.”….. “An application like OEA cannot deliver on its intended impact of improving patient outcomes worldwide without addressing the necessary network infrastructure, security and regulatory controls, data sharing/access/use contracts, and reimbursement, not to mention the culture of medicine and clinical adoption. Only through addressing these non-technical challenges, we will be able to translate a piece of technology, like OEA, into impact. That is what separates an innovation from a transformation…that is what makes it a moon shot.” — Dr. Lynda Chin, who led the Watson-based project at MDACC.

I see this as the most mission oriented statement in Tom’s article, coming from the only customer disclosed. MDACC has a clear mission in scientific research to eventually eliminate cancer so related ‘moon shots’ fall well within the organization’s responsibility. Most organizations to include most businesses do not share a similar mission as MDACC, which is why we took our R&D much further in applied form and removed as much risk as possible for customers prior to offering, even if admittedly lacking billions USD in development, marketing or sales.

Definition of Moonshot:

A moonshot, in a technology context, is an ambitious, exploratory and ground-breaking project undertaken without any expectation of near-term profitability or benefit and also, perhaps, without a full investigation of potential risks and benefits.”

If you concluded from reading this article that Kyield doesn’t claim to be a moonshot, that would be correct. Kyield does not provide artificial general intelligence, but rather offers a highly evolved system with as much complexity driven out of it as possible, so it is very much an applied system with a laser focus. While Kyield was a moon shot in the mid 1990s when developing the theorem in our lab, it is now a viable product and system at a very attractive price with a reasonably good probability of achieving an outstanding ROI.

Bringing discussion back to earth

Back down here on earth at the southern tip of the Rocky Mountains in the Land of Enchantment is a City Different called Santa Fe, which is over 400 years old. This area is known for history, art, culture, climate and science, the combination of which is why we brought Kyield here from the Bay area seven years ago to mature our R&D. While NM has vast open spaces made famous by Georgia O’Keeffe among others, we also have one of the highest concentrations of intellectual capital in the known universe, including of course the Moon!

I have a suggestion that is entirely compatible with moon shots of the Watson kind, which local theorists understand better than most, and that is to adopt a very pragmatic AI system that follows the rules of laws, physics and economics. We engaged in this process by the book, took massive risk, played strictly by the rules of engagement, invented an authentic system from scratch, and are now offering the world’s most advanced system at the confluence of human and artificial intelligence, which can be adopted at a tiny fraction of the cost as those described in Tom’s article.

In addition, while almost every single one of the Fortune 100 has benefited greatly from the science here in NM, most of which was produced with taxpayer’s money (Kyield is a rare exception in that regard), that value is almost always exported in the form of spinouts, flips and M&A, usually to the coasts and occasionally off-shore. This commercialization (aka tech transfer) model that generates considerable wealth for a very few has not manifested into benefitting NM from the beneficiaries of the R&D in the private sector, otherwise the numbers would be very different.

Seven decades after the Manhattan Project and hundreds of billions of dollars later, NM has yet to experience a significant business success, will soon surpass WV to rank dead last in unemployment, and has among the highest rates of poverty and crime in the U.S. And it isn’t just about education as many with advanced degrees are unemployed or underemployed here. Part-time wait staff at local hospitality establishments or gift shops holding doctorates is not uncommon.

So my suggestion is to come on out and visit Santa Fe just as hundreds of the leading minds in the world do each year, and we can then discuss in greater detail how our applied science in the form of the Kyield OS can help your organization ascend to a higher level of performance, and do the right thing for your career, organization and the economy in the process. In so doing you will empower us to empower NM and perhaps the rest of the global economy to ascend to the next level, which would be a good thing for everyone.

Oh, about that Watson we keep reading about? No worries, it’s likely compatible with the Kyield OS—that’s what all those APIs are for. And who knows, one of these days that moon shot may just pay off. In the interim we can help your organization ascend almost immediately following adoption of the Kyield OS!

Mark Montgomery

New E-Book: Ascension to a Higher Level of Performance


Power of Transdisciplinary Convergence (Copyright 2015 Kyield All RIghts Reserved)

Power of Transdisciplinary Convergence

Ascension to a Higher Level of Performance 

The Kyield OS: A Unified AI System

By Mark Montgomery
Founder & CEO
Kyield

I just completed an extensive e-book for customers and prospective customers, which should be of interest to all senior management teams in all sectors as the content impacts every aspect of individual and corporate performance.

Our goals in this e-book are fivefold:

  1. Provide a condensed story on Kyield and the voyage required to reach this stage.
  2. Demonstrate how the Kyield OS assimilates disparate disciplines in a unified manner to rapidly improve organizations and then achieve continuous improvement.
  3. Discuss how advances in software, hardware and algorithmics are incorporated in our patented AI system design to accelerate strategic performance and remain competitive.
  4. Detail how a carefully choreographed multi-phase pilot of the Kyield OS can provide the opportunity for an enduring competitive advantage by establishing a continuously adaptive learning organization (CALO).
  5. Educate existing and prospective customers on the Kyield OS as much as possible without disclosing unrecoverable intellectual capital, future patents and trade secrets.
TABLE OF CONTENTS
INTRODUCTION  1
REVOLUTION IN IT-ENABLED COMPETITIVENESS  2
POWER OF TRANSDISCIPLINARY CONVERGENCE  3
MANAGEMENT CONSULTING  4
COMPUTER SCIENCE AND PHYSICS  5
ECONOMICS AND PSYCHOLOGY  9
LIFE SCIENCE AND HEALTHCARE 10
PRODUCTS AND INDUSTRY PLATFORMS 11
THE KYIELD OS 11
THE KYIELD PERSONALIZED HEALTHCARE PLATFORM 12
ACCELERATED R&D 13
SPECIFIC LIFE SCIENCE AND HEALTHCARE USE CASES 13
BANKING AND FINANCIAL SERVICES 14
THE PILOT PROCESS 15
EXAMPLE: BANKING, PHASE 1 17
PHASE 2 18
PHASE 3 18
PHASE 4 18
CONCLUSION: IN THIS CASE THE END JUSTIFIES THE MEANS  21

To request a copy of this e-book please email me at markm@kyield.com from your corporate email account with job title and affiliation.

Revolution in IT-Enabled Competitiveness


Four Stages of Enterprise Network Competence

Most current industry leaders owe their existence beyond basic competencies and resources to a strong competitive advantage from early adoption of systems engineering and statistical methods for industrial production that powered much of the post WW2 economy. These manual systems and methods accelerated global trade, extraction, logistics, manufacturing and scaling efficiencies, becoming computerized over the last half-century.

The computer systems were initially highly complex and very expensive, though resulted in historic business success such as American Airlines’ SABRE in 1959 [1] and Walmart’s logistics system staring in 1975 [2], which helped Walmart reach a billion USD in sales in a shorter period than any other company in 1980.

As those functions previously available to only a few became productized and widely adopted globally, the competitive advantage began to decline. The adoption argument then changed from a competitive advantage to an essential high cost of entry.[3]   When functionality in databases, logistics and desktops became ubiquitous globally the competitive advantage was substantially lost, yet costs continued to rise in software while falling dramatically in hardware, causing problems for customers as well as national and macro global economics. In order to achieve a competitive advantage in IT, it became necessary for companies to invest heavily in commoditized computing as a high cost of initial entry, and then invest significantly more in customization on top of the digital replicas most competitors enjoyed.

The network era began in the 1990s with the commercialization of the Internet and Web, which are based on universal standards, introduced a very different dynamic to the IT industry that has now impacted most sectors and the global economy. Initially under-engineered and overhyped for short-term gains during the inflation of the dotcom bubble, long-term impacts were underestimated as evidenced by ongoing disruption today causing displacement in many industries. We are now entering a new phase Michael Porter refers to as ‘the third wave of IT-driven competition’, which he claims “has the potential to be the biggest yet, triggering even more innovation, productivity gains, and economic growth than the previous two.” [4]

While I see the potential of smart devices similar to Porter, the potential for AI-enhanced human work for increased productivity, accelerated discovery, automation, prevention and economic growth is enormous and, similar to the 1990s, while machine intelligence is overhyped in the short-term, the longer term impact could indeed be “the biggest yet” of the three waves. This phase of IT-enabled competitiveness is the logical extension of the network economy benefiting from thousands of interoperable components long under development from vast numbers of sources to execute the ‘plug and play’ architecture many of us envisioned in the 1990s. This still emerging Internet of Entities when combined with advanced algorithmics brings massive opportunity and risk for all organizations in all sectors, requiring operational systems and governance specifically designed for this rapidly changing environment.

This is a clip from an E-book nearing completion titled: The Kyield OS: A Unified AI System; Rapid Ascension to a Higher Level of Performance. Existing or prospective customers are invited to send me an email for a copy upon completion within the next month – markm at kyield dot com.

[1] https://www.aa.com/i18n/amrcorp/corporateInformation/facts/history.jsp

[2] http://www.scdigest.com/ASSETS/FIRSTTHOUGHTS/12-07-26.php?cid=6047

[3] Lunch discussion on topic with Les Vadasz in 2009 in Silicon Valley.

[4] https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition

A reminder on the benefits of volunteering


When you find yourself working long hours and buried with critical tasks, perhaps even behind schedule, it might just be the perfect time to spend a day volunteering. We did so this weekend and wanted to share while still fresh.

My wife Betsy is participating in an employer-sponsored health management program. Although not new for us it does require some discipline and rearranging of priorities that easily slip when responsibilities from business, work and life pile up.

Much more the volunteer than I, Betsy chose to spend the volunteer portion of the program with our local community outside of Santa Fe, NM, which recruits volunteers periodically to maintain the large private wilderness preserve the community owns and maintains. So she asked me to go with, and at the last minute I agreed.

Within a few minutes of our arrival at the community center we had a large circle of people standing out in the cool morning breeze introducing ourselves to each other, most having never met despite living in the same community for years. The project supervisor then walked us through the logistics for the day and briefed us on the master plan.

Part of something much bigger

A severe thunderstorm in the mountains last summer had damaged the wetlands area on the eastern edge of the preserve, which includes a large arroyo that also serves as a wildlife corridor between the Sangre de Cristo and Sandia mountains. The area where we live is in the southern-most foothills of the Rocky Mountains and part of the Galisteo Watershed, which drains into the Rio Grande. Our project to repair flood damage was a pleasant surprise for me as I’ve long appreciated the need for wildlife corridors for survival of species, healthy aquifers, ecosystems, and frankly quality of life for wildlife lovers.

A few of our wildlife photos in NM (click any for slideshow)

After driving our cars for a few minutes out to the project site, which is about a mile southwest of where I-25 crosses over the Galisteo Creek, we split into small groups to work on priority damage areas. Betsy cut and hauled Saltcedar (Tamarix), which is an invasive species that absorbs large amounts of water and deposits salt–quite a toxic problem in the western U.S. I worked with a couple of other guys and a tractor to haul rock from damaged sills to a small crew a half-mile downstream working to repair the most severely damaged area. And of course we all picked up garbage that had washed down with the flood.

Similar to many other wild areas, we could feel a sense of the variety of wildlife that graze on the native grasses, drink from pools, and use the arroyos as an interstate similar to I-25 that passes over their corridor just a couple miles upstream. One volunteer had scouted the work area during the previous week following fresh adult bear tracks. While we haven’t encountered a bear locally, we do regularly see coyote, bobcat, pronghorn, cottontails, and jackrabbits, as well as a variety of lizards, snakes, and an amazing variety of birds. We keep a birdbath outside our passive solar living room window, which attracts dozens daily ranging from small hummers to hawks.

Takeaway benefits

Apart from getting out on a nice spring Saturday, which we often do on foot, bikes, and skis, these are a few of the reminders I took away from our volunteer experience yesterday:

  • Unplugging:  Simply getting away from electronic devices for extended periods helps, particularly for me during exercise in nature. Shock; I left my phone in the car and survived!
  • Sweat equity in life:  While hard physical work is no stranger to us, I don’t engage as often as earlier in life. Unlike any other form of getting ahead I’ve observed; hard constructive work towards sustainability makes us feel like we’ve earned our keep for legitimate reasons—we are making things better—small contributions are required in many tasks.
  • Hands-on sustainability:  Reminiscent of work on our property in Arizona during the 1990s, repairing flood damage and performing erosion control in arid or desert climates is a great learning tool, creating awareness of the importance of micro and macro sustainability, aquifers, and benefit of other species. It helps us think differently, which in turn influences behavior, design, and adoption towards more rational and less self-destructive lifestyles.
  • Real teamwork:  Nothing like facing infinite boulders and toxic invasive plants for a reminder of the benefit of teamwork and need for efficient tools for the task at hand, as well as good communications.
  • Diversity:  The workgroup was more reflective of society than most; we had a mix of males and females ranging from 8th grade to 80. I suspect that it was more interesting and fun than would have otherwise been the case—perhaps more efficient and safer.
  • Appreciation for history:  Many volunteer opportunities around the world have historical context with deeper meaning, which helps to appreciate the need for wise and prudent stewardship. Our project happens to be in a particularly interesting area: The Santa Fe Trail and Battle of Glorieta Pass are in very close proximity, and Ancestral Puebloans have lived in the area since at least the 12th century BCE (Pecos Classification). The Pueblo Galisteo, which was still occupied in 1540 when visited by Coronado, and the Pecos National Historic Park, are within a few miles.
  • Initiative–experience counts:  The mission called for several yards of rock in a few hours, but the tiny tractor could only carry a dozen small boulders and took over an hour to make the mile+ round-trip. Fortunately, the driver was the community maintenance supervisor and thinking with initiative, aware of the truck and trailer back at the shop. After a bit of discussion we retrieved the equipment, cleared a path, and in one half-hour trip carried more than the tractor could have carried in a weekend, and did so with much less environmental damage. A good reminder that board members need trusted professionals with relevant experience, knowledge, and awareness who can think on their feet, adapt to reality, and get the job done.

Concluding thoughts

The old saying of no pain/no gain contains wisdom that is apparently not obvious to those who have felt little pain to get ahead. Laborious work helps us to appreciate the hard work of others, which is easy to take for granted otherwise, and can lead to inaccurate perspectives, poor judgment, and bad decisions.

There is much to be gained by immersion and first-hand experiential awareness that has no viable alternative. Hands-on experience may even be more relevant in volunteer work than in business. So regardless of interest, skills, location, or type, give both money and of oneself to a worthwhile effort. We’ll all be better for it.

How small states like New Mexico can compete in business


Mark on Wheeler summit - Oct 1993

Betsy-Wheeler Summit-Oct 1993

Mark and Betsy Montgomery on top of NM – October of 1993


I first studied the New Mexico (NM) economy about twenty-two years ago as an independent consultant through formal business and market audits, which was followed by covering the region in our incubator and venture capital firm a decade later. Six years ago my wife and I chose to move to NM from the Bay area, bringing Kyield with us.

So I thought it might be useful to contribute my perspective to the recent efforts to transform the NM economy into a more dynamic entrepreneurial economy. Hopefully this format is an appropriate method, offered in good faith with no conflict or investment other than as a local entrepreneur and citizen shared in much the same way I would have presented to a client in a verbal counseling session following a formal process, though hopefully also reflective of a great deal of expensive lessons since.

One commonality found in many flyover states and countries is a culture suffering from low self-esteem, which is often well earned by toxic macro economic policies or other factors. My sense of this since living in NM is that victimization is deeply rooted, and was quite strong during and after the peak of the global financial crisis. In a state that has never experienced a significant business success, especially in an era of historic financial consolidation, it’s understandable that NM would be a bit cynical.

However, although NM’s history is peppered over the centuries with strategic blunders in far-off capitols, it’s important to avoid allowing moral hazard to further harm NM in the future, as the state needs to reduce dependencies and create an economically diverse economy. Private sector growth and diversification are particularly important at this point in NM’s history given the fiscal projections of the federal government, which could threaten a significant portion of the NM economy in the near future. In addition, disruptive technical threats to oil and gas are maturing rapidly.

It is therefore not only important for NM to understand that it has the capacity to compete with anyone, but it may be imperative to do so, which should translate to a very high priority for accelerating private sector diversification.

During my earlier years assisting other entrepreneurs and communities we developed a comprehensive list of fourteen ingredients regional economies needed to be successful, eight of which we considered essential, though weak areas can be shored up in a variety of ways to meet minimal viability—short of luck of course.

The most important lesson every state can learn is that each has more than sufficient capacity to achieve a robust economy, provided the community is willing to do just a few things well. The following are a few essentials from that list that clearly need work in NM.

  1. Work as a team.

As difficult as it may seem in our polarized society, ideological and partisan disagreements must be substantially removed from the process of competing in business. A personal case for me was as a young entrepreneur and member of ‘Team Washington’ in the 1980s, which produced an environment where several global business leaders emerged as well as many smaller companies. Of course Washington is only one of dozens globally that should be considered, and every region should perform their own tailored SWOT analysis to guide adaptive action plans, but a few similarities exist that NM and other regions should consider.

The Puget Sound economy had become far too dependent upon the federal government and the Boeing company in the post WW2 era, both of which experienced devastating cut backs in the 1960s and early 1970s reflected by the famous billboard in 1971 sponsored by local real estate brokers: “”Will the last person leaving SEATTLE — Turn out the lights”.

A decade later the informal team effort I played a small role in included members from all sectors of the regional economy led by a few of the more experienced in business ranging from the largest to the smallest in close collaboration with local and state governments, universities, and non-profits. Although the Puget Sound economy enjoyed considerably more strength than NM, it was a small community compared to leading capital centers with a relatively small group of dedicated leaders providing much of the heavy lifting.

While Seattle and the U.S. have changed greatly since the 1980s, we didn’t discuss politics much in the civic minded business building endeavors. With few exceptions I wasn’t even aware of party affiliation of the other members I met. The focus was economy, business building, community building, winning, and having some fun along the way.

Among the most important takeaways from Washington and many other engagements since is that individual and team efforts may or may not be personally rewarded. While communities should work diligently to support those who support them, the nature of modern economic growth is like life itself—quite dynamic and not always just. The broad impacts from a few may not necessarily be appreciated.

  1. Keep it clean

Given the recent history of D.C., Wall St. and the famously incestual nature of Silicon Valley, this may be shocking or even unwelcome, but the governance breakdown in power centers is precisely why it’s so important for regional centers to rebuild on strong foundations. Trust and integrity are critical to entrepreneurial cultures. The corrosive cost of corruption is well understood by those who study global economics and markets.

In my first several meetings in NM with officials and professionals I was warned of this systemic unmentionable problem, some of which I had observed in earlier audits, but it was still shocking to see so many felony cases involving public entities in NM. Of course different types of corrupted systems and processes exist, not all of which are illegal—abuse in government contracting is a good example, but are still toxic to the type of entrepreneurs smaller markets need in order to become more dynamic and diversified.

States like NM that have a poor track record with investors need to make an especially robust effort in improving governance, transparency, and honest trade. While progress has been made in NM in recent years, it takes time and effort to improve reputations.

  1. Enhance strengths, mitigate weaknesses

If NM hasn’t performed a SWOT analysis led by a seasoned business consultant with relevant skills and knowledge it should do so, as should each state and local community that desires to improve competitive outcomes. The process itself has considerable value. Among the most important aspects of becoming a competitive business or regional economy is in raising the bar to the competitive level. While this includes continuous learning by and for business leaders and entrepreneurs, it’s just as important for local institutions, employees, and communities. Almost everyone in a community has numerous untapped opportunities to improve the regional economy.

A common misunderstanding today across the U.S. and EU—including NM, is that success is born only from direct strategic interests. In fact diversified economies require just the opposite. If the team effort is restricted even primarily to personal or institutional strategic interests, most competitions will be lost. For example, while benefiting a great deal from behind the scene support by many and direct efforts by a few, Microsoft, Costco, and Starbucks were not products of local institutions, though benefited from community support. The same is true for most successful businesses I’ve been close to in my career.

The critical part of modern economic success through business building is the ability to identify and match opportunities and talent with appropriate resources, which is a continual never-ending process in conjunction with the constantly changing economy. While every business has unique qualities, each has essential needs that simply must be met. NM is unusually challenged with lack of customers and corporate headquarters, which simply means significant focus must be placed on overcoming those weaknesses. It’s rather obvious, but if few local customers exist and many of those that do are government, a competitive private sector marketing effort becomes essential.

Although NM has strength in corporate relocation, tourism, film, art, and agriculture, which could no doubt be further leveraged across sectors, a certain degree of conflict exists between states and federal institutions, which is reflected in organizational and regulatory structures and extended to tech transfer and spin outs. While governance challenges, institutional conflicts, strategic venturing and dependency on fossil fuels and government are not unusual, the impacts in NM are more significant than most.

Though more critical in NM due to a few large institutions, competitive regional markets must learn how to play together well on the same team even if primarily extra curricular, civic minded and informal, though still high priority. Informal civic-minded team efforts should be supported by institutional sponsors with appropriate pressure applied if necessary, but should not be considered alternatives for highly sophisticated business intelligence methods found at any competitive organization today.

  1. Support local ventures

Economists have labeled this phenomenon ‘regional bias’. It became somewhat out of vogue in the U.S. during the rapid expansion of globalization in part apparently due to a combination of the growth needs of leading corporations and consolidated wealth in the hands of a few who had both financial and ideological interest in moving industry abroad. While global trade is mutually beneficial, scholars generally agree that the trend was overdone. Although we’ve experienced some recent improvement in regional efforts in the U.S., my personal experience suggests functionality has not returned to levels enjoyed during peak performance or to the degree found in other parts of the world, including Europe, Asia and in U.S. capital centers, which have very large, highly sophisticated strategic ecosystems.

The lack of sufficient capacity for proactive regional growth represents what I believe to be the single most important reason why NM has had little success. Smaller regional economies must become much more proactive and sophisticated in competing in the new normal that is the global economy, even if within a single company. This is particularly true with deep tech ventures that represent one of NM’s biggest strengths, which requires highest-level b2b marketing and sales sophistication, consultative sales and relationship management. While it’s true that young inexperienced entrepreneurs need boot camps, mentors and training, seasoned professionals of the type required for competitive businesses at growth stage need competent partners and strong allies.

Businesses across much of the U.S. have also experienced a significant spike in regulation and ‘NIMBY’ (Not In My Back Yard), the combination of which has resulted in a great many business ventures becoming economically infeasible, including in NM. In personal communications some people in NM seem more concerned with avoiding the impact of a Microsoft on the regional environment and quality of life—including a few who are charged with the responsibility of economic growth. Predictions early in the life of companies on future economic impact are rarely accurate, including those by Microsoft. Attempting to project such divinity in venturing by communities has proven unwise, though quite common in underperforming markets.

The best that can be done is to identify rare talent and ventures with significant potential and get behind them and then work very closely through every stage of planning to mitigate negative impact in an attempt to achieve a balance that can best serve the interests of citizens. A good example is Intel, which has a small headquarter footprint in CA with operations dispersed globally, including of course NM. Another example is Nestle in Switzerland, though a great many emerging small to mid-sized companies are distributed today. The talent, experience and wealth corporate headquarters bring to communities should not be underestimated, particularly for tax base, economic security and nonprofits of every type, including charities that struggle for funding in NM.

A widespread trend across the U.S. in recent years is to rally primarily around incubators. While community incubators and accelerators are wise for many, the quality of entrepreneurs and management teams combined with community functionality and the quality of their networks all contributes to success. My definition of a functional regional community is one that can identify and support in a relevant manner mutually beneficial entrepreneurs and ventures, regardless of whether spun out of an institutional lab, dorm room or garage. The priority should not be about proving the success of a public program or to expand institutions—which tends to consolidate power rather than diversify, but rather should only be focused on the actual needs of the business and their customers with the understanding that it is a dynamic process that can be nurtured, influenced and even guided at times, but not controlled. Early flames are easy to smother or blow away into the welcome arms of competitors with ample fuel.

Several people involved in the NM entrepreneurial economy have requested that I share actual cases to compare and learn from. The following cases represent failures I have experienced first-hand over the past six years. Names and affiliations have been withheld in an attempt to provide anonymity—the goal is to share and inform, not to blame or prosecute. In some cases it may have been just a bad day, though others were tested multiple times, representing a clear and consistent pattern.

  • Federal institutions that hide behind regulation and blame the community for their lack of ability to play a decisive role in growing regional business for the long-term. A common problem recently highlighted in D.C. by visiting Google engineers, using regulation as an excuse to fail has much greater impact in NM due to the lack of other powerful entities. To their credit, many individuals working for federal institutions go above and beyond in an attempt to assist, but obviously lack relevant tools or skills to do so—otherwise NM would have had a much more diverse economy long ago. It is a very frustrating situation for many. NM needs new and better models for deep tech manifesting into a few regional headquarters. At a macro level, U.S. R&D badly needs to be brought into this millennium through structural reforms, appropriate governance and modern systems.

  • Public employees at all levels charged with various elements of the economy who are either unqualified and/or lack the passion to achieve success. In one meeting I was given a clear message that economic success wasn’t welcome in NM unless it was in the form of government growth. In another the individuals didn’t seem to have any understanding that economic development isn’t a jobs program, but rather the outcome of growing successful businesses.

“If government didn’t fund it”, one key person said they had “no idea what to do”. Well, their roles were funded—that’s why their jobs exist! Most functional business development efforts are not just funded programs, but rather results of many actions taken by a community in deploying every type of resource they have for the benefit of their own community. Such a culture is found almost anywhere that has a thriving entrepreneurial economy. The most important role a community can provide for emerging companies is assistance in attracting customers at the critical early stages.

Public employees should be a catalyst to regional business success, not a barrier. Leaders should help communities understand that each and every effort may be leading to new customers, tax payers, future employers for their children or neighbors, or a future funder of much needed local services.

  • Senior managers in regionally headquartered organizations that demonstrate little to no interest in the success of others, even if to materially impact their own success. This shocked me more than any other type of negative experience.

1) CEO of a regional private company which has a mandate to engage with business as one of their primarily responsibilities. When I sent an invite to connect in a social network we belonged to, the individual responded ‘not interested’. The irony in this case is mutual invitations were sent and accepted by more than a dozen of their competitors in other states and countries, including companies 100x their size.

2) Senior management in a large business unit of a state funded entity with important synergies failed to respond to multiple attempts to connect in various ways while their peers and competitors not only accept, some assist and others have reached out to us in several states and countries.

3) Multiple non-profits with stated missions that include some element of community economic empowerment including in two cases specific missions to collaborate with private sector businesses, yet seem primarily engaged in fund raising, projecting personal ideology and sustaining their own lifestyles with other people’s money.

4) Almost every large organization in NM I’ve encountered including public, private and non-profit, most that would benefit directly and significantly from the success of my or a similar company here behave in a manner that serves primarily the interests of competitors to NM.

This list goes on, representing a systemic if fragmented problem in NM, which is a small economy that simply can’t afford not to have every leader and organization fully engaged at this point in history. These experiences clearly speak to the need for leadership training, education of board members and proactive peer pressure regarding personal and organizational responsibility for the economic health of their communities.

Of course we could have done a better job of working with NM, though NM entrepreneurs are so busy overcoming these kinds of regional obstacles in addition to what is an increasingly challenging task with no additional obstacles, so the administrative class needs to step up, roll up their sleeves, get to work and help win some battles. Bottom line is many entrepreneurs in NM have relocated with significant success while none in NM have achieved even a modest success by universally comparable standards. Of the few successes that exist, multiple have no customers in NM or have ever received the kind of growth support competitors enjoy in their regions.

Those who think they are too busy to engage in the extra curricular work required in building and sustaining healthy economies should try personally paying for the pleasure of being a soldier in the economic war on behalf of a community that doesn’t support them in a meaningful way. I’ve met quite a few such entrepreneurs in NM. Leadership priorities need to be recalculated to the new normal economy that will likely include far fewer subsidies and more performance based compensation. Get onboard.

  1. Become early adopters, disrupters and defenders

I never confirmed whether the story was true, but one of my first meetings in NM was with a nice couple in their home in downtown Santa Fe. Both were academics, one a native NM professor at a local university, the other a researcher in a different discipline. The professor told me that he once asked his university to acquire an innovative software system only to be told by his administration that state law required public entities to use a certain ubiquitous product we are all very familiar with.

Organizations are only as innovative as the systems employed allow them to be and ubiquitous systems provide no competitive advantage, but then that’s obvious right? I have confirmed that professional IT lobbyists for incumbents are located in tiny NM, which may be instructive on why the regional economy exports hundreds of millions of dollars annually for technology. While exceptions exist, most tech companies gain initial customers regionally and then expand globally, including those locations where NM sends its budgets. If members of the regional economy are not encouraged to support each other, as incumbents obviously intend—they are likely not to make the attempt.

In a perfect world companies in far off places that benefit from regional purchases would find more ways to reciprocate, but in practice mature companies are under severe pressure to improve quarterly profit growth. Entrepreneurs are often left little choice—if to succeed many are forced to take a disruptive path, which requires special talent, guidance and assistance.

While it may be difficult for NM institutions to think and act in a manner that may seemingly misalign with corporate relationships, we only need look at the results for guidance. NM and other flyover states need to learn the art and science of disruptive innovation, which also means exploring unobvious alliances with customers, other industries, and distributors—perhaps in other nations. The bar for deep tech is especially high as are the stakes for all concerned and should be treated accordingly.

  1. Allow experience to act as a guide

A common problem across the world in underperforming markets, which has increased in much of the U.S. and EU in recent years is also found in NM—allowing ideology, popularity and/or unhealthy business relationships trump experience in leading strategy and execution that impact business and economic competitiveness.

While most environments suffer from this problem to some degree and networks are very important, the reason why those networks exist is the relevant factor. A million followers in consumer social media can be of no value in b2b, while one trusted relationship can be invaluable. The core of functional global business is experiential knowledge that has been demonstrated over time in multiple environments. Those in government and academic cultures rarely understand that the entrepreneurial process is the most expensive education in the world, and top-tier performers are the most valuable. Regions that fail to understand this and listen to experience do so at their peril.

I will offer two recent cases of tragic failure in NM as examples of what to avoid.

1) During my first year living in NM I attended several local networking functions, primarily for social value and to explore methods to assist, including angels, innovation, associations, etc. During one such event I met a recently retired senior tech executive who shared multiple professional relationships in an industry that is very important to NM. As the event intended, our private discussion soon turned to NM, including our experiences, so after answering a few of his questions about my activities I listened to his.

In a very mature, respectful manner this still vigorous exec shared how he had intended to find a way to assist NM when retiring here, as his knowledge and network were still obviously strong and fresh, but after two years of frustrated efforts he gave up. I think he has since relocated out of state. He painted a picture of a culture that believed in a hypothetical economy rather than navigate successfully in the real-world economy and markets. He was visibly disappointed, representing one of few failures in his career. Over the next two years his experience would become my experience in an almost identical confirmation, so I retreated and focused primarily on my own company, which requires even more energy and sacrifice because of this situation.

2) A very successful retired entrepreneur and executive and I have long shared an interest and relationships in a NM non-profit. He and his wife retired in NM part-time due primarily to this commonality, and much like the case above he attempted to boost the entrepreneurial economy with expertise, investment capital and his extensive network. In fact he and his wife invested a significant amount of money, time and credibility in support of non-profits and venturing, but within a few years became frustrated by what he considered to be a failed effort. They sold their home and relocated out of state.

The tragedy these two experiences represent is that each is highly respected across large global networks, which no doubt gleaned similar stories. And both were from industries NM has long sought to grow with considerable investment and energy to attract the attention of precisely these same individuals and their networks. These were two of the most experienced tech execs I’ve met in NM, were badly needed in every sense I understand about the regional economy, but were chased away. As a business and economic consultant during my first visits to NM I would have diagnosed this behavior as self-destructive, requiring intervention by professional specialists and credible, trusted leaders.

Mark and Betsy Montgomery with Austin on top of NM - Oct 2014

Mark and Betsy Montgomery with Austin on top of NM – Oct 2014

Closing thoughts

In the many conversations with business leaders I’ve had over the course of the last 22 years about NM, it may be surprising for some to learn that in every case I recall we all wanted to see NM become more competitive, dynamic and diverse, and in so doing provide more opportunity and economic security for its citizens. Most share NM’s view on the environment, science, art and culture—indeed in many cases this brought them to NM.

However, none of us are magicians—we can only help those who are driven to help themselves and learn from their own mistakes as well as others. While failure is common in business building—even celebrated in pop culture today however inappropriately, repeated failure to act on lessons learned is rarely tolerated in business, whether by investors, lenders, partners, customers, or employees.

Speaking for myself as well as perhaps many of my fellow entrepreneurs, I sincerely hope NM grasps its future firmly in its hands and sculpts it into a more vibrant, diversified, dynamic and sustainable future.

Mark Montgomery is founder and CEO of http://www.kyield.com, which offers an advanced distributed operating system and related services based on his patented AI system.

Recent trends in artificial intelligence algorithms


seppdeep754x466

Promise of spring reveals interesting hybrid variants

Those of us who have been through a few tech cycles have learned to be cautious, so for the second article in this series I thought it might be helpful to examine the state of AI algorithms to answer the question: what’s different this time?

I reached out to leading AI labs for their perspective, including Jürgen Schmidhuber at the Swiss AI Lab IDSIA. Jürgen’s former students include team members at Deep Mind who co-authored a paper recently published by Nature on deep reinforcement learning.

Our Recurrent Neural Networks (RNNs) have revolutionized speech recognition and many other fields, broke all kinds of benchmark records, and are now widely used in industry by Google (Sak et al.), Baidu (Hannun et al.), Microsoft (Fan et al.), IBM (Fernandez et al.), and many others. — Jürgen Schmidhuber

Jürgen recently published an overview on deep learning in neural networks with input from many others, including Yann Lecun, Director of AI Research at Facebook. Lee Gomes recently interviewed Lecun who provided one of the best definitions of applied AI I’ve seen:

It’s very much interplay between intuitive insights, theoretical modeling, practical implementations, empirical studies, and scientific analyses. The insight is creative thinking, the modeling is mathematics, the implementation is engineering and sheer hacking, the empirical study and the analysis are actual science. What I am most fond of are beautiful and simple theoretical ideas that can be translated into something that works. — Yann Lecun at IEEE Spectrum

Convolutional neural networks (CNNs)

Much of the recent advancement in AI has been due to convolutional neural networks, which can be trained to mimic partial functionality of the human visual cortex. The inability to accurately identify objects is a common problem, which slows productivity, increases risk, and causes accidents worldwide.

CNNs make use of local filtering with various max-pooling techniques and fewer parameters that make NNs easier to train than in a standard multilayer network. The invention and evolution of the nonlinear backpropagation (BP) algorithm through multi-layers, combined with other supervised learning methods, have enabled nascent artificial intelligence systems with the ability to continuously learn.

CNNs are valuable for a wide range of applications such as diagnostics in healthcare, agriculture, supply chain quality control and automated disaster prevention in all sectors. CNNs are also applied in high performance large-vocabulary continuous speech recognition (LVCSR).

FitNets

Yoshua Bengio is Professor at Université de Montréal and head of the Machine Learning Laboratory (LISA). He is making good progress on a new deep learning book for MIT Press with co-authors Ian Goodfellow and Aaron Courville.

What’s different? – More compute power (the most important element) – More labeled data – Better algorithms for supervised learning (the algorithms of 20 years ago—as is don’t work that well, but a few small changes discovered in recent years make a huge difference) — Yoshua Bengio

Yoshua and several colleagues recently proposed a novel approach to train thin and deep networks, called FitNets, which introduces ‘hints’ with improved ability to generalize while significantly reducing the computational burden. In an email exchange, he shared insights on thin nets:

The thin deep net idea is a procedure for helping to train thinner and deeper networks. You can see deep nets as a rectangle: what we call depth corresponds to its height (number of layers) and what we called thickness (or its opposite, being thin) is the width of the rectangle (number of neurons per layer). Deeper networks are harder to train but can potentially generalize better, i.e., make better predictions on new examples. Thinner networks are even harder to train, but if you can train them they generalize even better (if not too thin!). — Yoshua Bengio

Long Short-Term Memory (LSTM)

Sepp Hochreiter is head of the Institute of Bioinformatics at the JKU of Linz (photo above), and was Schmidhuber’s first student in 1991. Schmidhuber credits Sepp’s work for “formally showing that deep neural networks are hard to train, because they suffer from the now famous problem of vanishing or exploding gradients”.

Exponentially decaying signals—or exploding out of bounds, was as scientists are fond of saying— a ‘non-trivial’ challenge, requiring a series of complex solutions to achieve recent progress.

The advent of Big Data together with advanced and parallel hardware architectures gave these old nets a boost such that they currently revolutionize speech and vision under the brand Deep Learning. In particular the “long short-term memory” (LSTM) network, developed by us 25 years ago, is now one of the most successful speech recognition and language generation methods. — Sepp Hochreiter

Expectations for the near future

We will go beyond mere pattern recognition towards the grand goal of AI, which is more or less: efficient reinforcement learning (RL) in complex, realistic, partially observable environments… I believe it will be possible to greatly scale up such approaches, and build RL robots that really deserve the name. — Jürgen Schmidhuber at INNS.

Unsupervised learning and reinforcement learning remain prizes in the future (and necessary for real progress towards AI, among other things), in spite of intense research activity and promising advances. — Yoshua Bengio via email.

Deep Learning techniques have the potential to advance unsupervised methods like biclustering to improve drug design or detect genetic relationships among population groups. Another trend will be algorithms that store the current context like a working memory. —Sepp Hochreiter via email.

My perspective

Pioneers in ML and AI deserve a great deal of credit, as do sponsors who funded R&D through long winters. One difference I see today versus previous cycles is that the components in network computing have now created a more sustainable environment for AI, with greater variety of profitable business models that are dependent upon improvement.

In addition, awareness is growing that learning algorithms are a continuous process that rapidly creates more value over time, so organizations have a strong economic incentive to commit resources early or risk disruption.

In the applied world we are faced with many challenges, including security, compliance, markets, talent, and customers. Fortunately, although creating new challenges, emerging AI provides the opportunity to overcome serious problems that cannot be solved otherwise.

Mark Montgomery is founder and CEO of http://www.kyield.com, which offers technology and services centered on Montgomery’s AI systems invention.

This article was originally published at Computerworld