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The Algorithmic Economy Continues its Rise

By Dick Weisinger

The world is changing rapidly due to advances in artificial intelligence (AI), application programming interfaces (APIs), computer languages, and emerging technologies. These changes are creating new opportunities and challenges for businesses, consumers, and society as a whole. One of the most significant trends is the emergence of the algorithm economy, where algorithms are the main drivers of value creation and exchange.

The algorithm economy is a term coined by Gartner to describe the evolution of microservices and the functionality of algorithms to drive sophisticated application designs. In the algorithm economy, companies can buy, sell or trade individual algorithms or pieces of an application. This decentralization of services is a more precise market than the market for full applications – for instance, applications that can share functional algorithms lead to more versatility for developers and more competition in markets.

The algorithm economy also enables new forms of collaboration and innovation across different domains and disciplines. For example, researchers from economics, computer science, engineering, and mathematics can work together to improve the basic sciences of complex markets and social/communication networks, such as data markets, social networks, electricity markets, cloud computing, and even privacy. Algorithms can also help solve some of the most pressing problems facing humanity, such as climate change, health care, education, and security.

However, the algorithm economy also poses some risks and challenges that need to be addressed. For instance, algorithms can have biases, errors, or malicious intents that can harm individuals or groups. Algorithms can also create new forms of inequality, exploitation, or domination that can undermine human dignity and autonomy. Algorithms can also be difficult to understand, explain, or regulate, especially when they involve machine learning or artificial intelligence.

Therefore, the algorithm economy requires a new set of skills, ethics, and governance frameworks that can ensure its responsible and beneficial use. It also requires a new mindset that embraces creativity, curiosity, and collaboration as the key drivers of innovation and value creation. The algorithm economy is not just a technological phenomenon; it is a social and cultural one that will shape the future of humanity.

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