Why data science is the new economics?

Original article was published by Baraka soka on Artificial Intelligence on Medium


Why data science is the new economics?

Economics is the field that provides a well established foundation for understanding uncertainties and making better decisions. Since it deals with understanding human behaviour with respect to statistical data for better decision making, then more data and better predictions reduce uncertainty.

The new field of Data science is the real deal when we are talking about statistical data, it’s more of big data analytics and making predictions through machine learning algorithms which drive better decisions in business and improve the economies. Ever since the rise of GPU’s and programming languages such as python and R, computers have been able to analyse, train and test very large amount of Data with high accuracy of predictions than STATA and SPSS.

How did Data science perfect economics?

To start with Linear regression, logistics regression algorithms in economics, Data science includes both and also include more algorithms like Decision trees, Support Vector Machines(SVM), Naive Bayes and the most important Neural Networks, algorithm used in making AI models for automation.

Let’s now talk about the basics, we all know that economics is all about production, consumption, exports and imports with the main variable, prices. When price of something falls, we use more of it. That’s simple economics and is happening right now with AI, a sub-field of data science. AI is now applied everywhere from your phone apps to your health analysis. AI is not about robots and terminators taking the world like we see on movies, its about reducing the cost of living and that’s what simple economics is all about.

The country with the most data and best AI will make the rules of the world.

Data vs Economy

Countries with great economies have always been the most powerful and make decisions concerning the entire world, but now is not about economies anymore is all about data. As the internet is becoming cheaper and cheaper, the internet companies like Google, Facebook and Amazon have become the most valuable companies that make more profit than any in the world history, because they are the owner of most data. The data can be used to manipulate individual decision making in politics, social life and even on what to purchase, hence influence the whole economy.

From making better prediction, reduction of cost, better production by automation and accuracy from data science field, will improve business and make better economies than never before and data being the engine.