#94 Professor Robert Seamans: A Stern Researcher on the Effects of AI and Technology on the Economy
In the past couple months, we had the honor of interviewing Professor Robert Seamans. He imparted on us eye-opening knowledge regarding the role of technology in the interactions among firms, and how technology and AI can affect the economy. Professor Seamans is an Associate Professor of Management and Organizations at NYU Stern. He is also the Director of the Center for the Future of Management at Stern. His work has been published in leading news outlets such as Forbes, New York Times, and the Wall Street Journal.
Professor Seamans credits his success to long education. As part of his dissertation for his major in English literature, he had to minor in a foreign language, so he picked Chinese. Studying abroad in China for his minor, he saw China rapidly develop into an industrial and capitalist country, which captivated his interest in economics and business. Upon his return, he completed his English major, but took the maximum amount of economic elective classes to pursue his interests. Unsatisfied, however, he went to Yale to obtain an MBA. At first, he thought a consulting job would be a good fit for his interests, but soon found out that it was not abstract enough for his liking. After discussing his conundrum with Fiona Scott Morton and other professors at Yale, he decided that the best route for him was to pursue a PhD and become a research professor. However, he lacked the mathematical skill to qualify for a good PhD program. So, he enrolled in Boston University for a master’s in business, taking all the core classes and math classes for all his electives.
The moral of this story, Professor Seamans says, was that once you figure out what you want to do, put a step-by-step plan together to achieve it, which is what he did once he decided to be a research professor. This plan kept Professor Seamans on track despite his doubts. In his calculus class at Boston University, there were several excelling high school students while he was struggling with the content as a man in his thirties. He was overcome with doubt, insecure of his skill, and sure this was a step backward. However, he overcame this doubt and several others by reminding himself of his long-term plan which got him into his dream PhD program at UC Berkeley that would let him become an economics research professor.
When talking to Professor Seamans, we brought up the common analogy that data is the crude oil of the 21st century. He proves the accuracy of the analogy by explaining data is a scarce commodity that changes the course of history and the balance of power. Some nations have data while others do not, which is of course similar to the situation with crude oil. Seamans attests that, on a smaller scale, disparity overall is driven by the difference between firms that have data and those that do not. Firms are aware of this and now hoard data.
Regarding technology and firms, Seamans says there should be a census that collects data concerning the technology and AI use of companies. He thinks it’s vitally important that the US understands which firms use what technologies because it will help determine the correlation between technology and the productivity of these firms. This data would help inform government policy. For instance, if certain robots improve productivity and employment, it is in the interest of the government to pass legislation that makes it easier to obtain such robots. It is also a potential way to track how the US is doing in relation to other countries. This practice of following the effects of technology is observed in Canada, Norway, and China, which makes it something we must soon implement.
Due to the lack of this census, much of Seamans research explores the relationship between technology and companies. According to his analysis, as well as several other studies, robots are positively correlated with employment, contrary to popular belief. A possible reason for this is that robots greatly increase output, which lowers costs, increases the equilibrium quantity demand, and provides the income to hire more workers. However, these new workers are more educated and have some sort of technical knowledge, which means that robots also change the demographics of employees in various industries.
Although technology in business has several benefits, there are several ethical drawbacks. An example includes the Facebook algorithm that provides posts that polarize your existing viewpoints. Another includes a company called Compas that employs machine learning algorithms that wrongly yet consistently indicate black criminals as two times more likely to reoffend than their white counterparts, when in reality they do not. To mitigate these negative aspects of technology, Seamans encourages government regulatory policy in combination with clarifications regarding the laws of AI and technology so individuals could more easily sue firms for misuse. He also advocates for a new profession he calls an ‘algorithmic explainer’. These explainers would work at each company and explain their complex algorithms and AI in plain language to the broader public. They will keep firms accountable and reduce ethical violations.
Professor Seamans’ advice for students looking to make an impact is quite straightforward. Think about the things you enjoy doing and ways to turn that into something that can make a difference in the world. Do not worry too much about the career path – instead seize every opportunity to explore your interests and embrace the mistakes you may make along the way. More specifically, he suggests taking online courses in programming and data analytics, as these concepts are becoming of increasing importance. He also suggests pursuing summer internships where you can practice using these tools in a real business environment.
You can watch the full interview here.
Interviewers: Rahul Kavuru and Srikar Parsi
Author: Nishant Nagururu
Editor: Afia Lateef
Graphic: Sraavya Penumudi
Video Editing: Chinmay Korapati