Coining the Term: Artificial Utility

Posted on January 30, 2017

AI: Artificial Intelligence. Everyone knows it’s coming. Many know it is here today. We continue to read stories about AI being advanced on by the likes of Google, IBM, and most all of Silicon Valley.

There is a trend to be noticed, however, that few are noticing. I’m coining the term now: artificial utility™.

Utility is a well-known economic term, which basically means the “useful-ness” a consumer obtains from a good. The utility you gain from a Honda Civic will be different from the utility you gain from a Triumph Bonneville T120, depending on the person.

So then, what is artificial utility? Artificial utility is the useful-ness we are synthetically obtaining–that is, utility we think we are getting–from AI-driven technology and robotics. Just like artificial intelligence isn’t really intelligence, artificial utility isn’t really utility.

Take Cafe X for instance. You can have an intelligent robot make your coffee, and it only takes 20 seconds! Other features include:

• Order your coffee through your smartphone or a kiosk.
• Customize your order just as you would with a live barista.
• Know when your order is made and when it is ready, by receiving text notifications. This allows you to order ahead for a specific pick-up time.
• Secure pickup with a 4-digit pin number.
• No chance of your order being wrong, unlike your experience at Starbucks.
• The machine is calibrated to truly get your coffee right, based on equipment configuration.

Let’s evaluate its utility:

• You get coffee. It tastes good.
• You get it quickly (assuming the machine isn’t backlogged with orders, or the wifi doesn’t goes down, or the software doesn’t have a bug, or a mechanical piece doesn’t break, or someone doesn’t hack it).
• You witness a robot make your coffee.

Now, let’s evaluate the utility of the standard Starbucks experience:

• You get coffee (although with an egregiously misspelled name). It tastes fine to good, depending on what you like to order.
• You get it quickly (assuming the baristas aren’t backlogged with orders, or the POS system isn’t down, or human error occurs).

Which is better? If you believe the hype from Wired Magazine, Cafe X is clearly superior. According to Wired, you get a perfect cup of coffee in a service time between 22 and 43 seconds, depending on the order. But in reality, the only difference is that you witness a robot make your coffee. Assuming the law of diminishing returns as applied to utility, let’s say that the novelty has worn off by third time you see the robot whip up your latte. So, after three times at each a Cafe X and a Starbucks, which is better?

The more that this technology reaches the everyday consumer the more we are going to be “convinced” that the AI-driven version is far superior to the obsolete human rendition. But remember, the base utility of the good/service hasn’t changed, only the appearances have (artificial utility). Keep that in mind next time you hear news come out of Silicon Valley.