Humans in the Age of Artificial Intelligence: Automation, Market Structure and Skills

Kumar Aniket

Associate Professor in Infrastructure, Automation and Economic Transformation
Institute for Connected Communities
University of East London

 

  16th International Conference on Logistics, Informatics and Service Sciences  
  Wolfson College  
  University of Cambridge  
  19–23 July 2026  

Perception about AI

Perception about AI

Cyclically adjusted price/earnings ratio

CAPE is defined as today’s value of the stock market divided by the average of the previous 10 years of earnings per share, both in real terms.

Perception about AI

Buffett indicator

Buffett indicator ratio of the total value of the stock market to GDP

Coastal Fish Market in Kerala

Jensen (2007)

  • Fish is the staple diet in Kerala, India
    • Kerala has a long coastline with fish markets dotted along the coast

Fisherman have a choice of which fish market they land their fish in

  • Information problem after the fisherman catch their fish
    • They do not know the price of fish in each market on a particular day

Coastal Fish Market in Kerala

Jensen (2007)

  • Fisherman had to choose the port/market where they would get the best price for their catch
    • Fish merchants bought the fish from the fisherman and sold it to the consumers
      • If fish merchants already had enough fish on the port they landed, the fisherman would just jettison their catch

Markets dysfunctional

Sequential Roll out of mobile phone technology

 

 

Space over which markets operate

Movement is an essential part of the modern economy

  • New technology creates new space for information flow
    • spaces that did not exist previously
    • The space are especially customised for the flow of information

Movement is an essential part of the modern economy (2)

Creating space for movement (flow)

Internal space

  • Requires creating an internal space which facilitates flows

Movement is an essential part of the modern economy (2)

Creating space for movement (flow)

Internal space

  • Requires creating an internal space which facilitates flows

 

Rules of the Space

Rules that govern the space and objects within it that facilitate the flow within the space

  • isolate the space from external it immediate space
  • control entry and exit points

Movement is an essential part of the modern economy (3)

Spatial Infrastructure

  • There is a specific sub-class of infrastructure that facilitates flow of information with its various intangible design elements that adhere to these rules

Three waves of technology

1960s–1980s

┌-------------------------------------------------------------┐
| 1. Computational Foundation Wave (Data Creation/Storage)    |
|    - Silicon, Microprocessors, Relational Databases         |
└-------------------------------------------------------------┘

1990s–2000s

┌-------------------------------------------------------------┐
| 2. Connectivity & Transmission Wave (Data Flow)             |
|    - Internet, TCP/IP, Cloud, Optical Fiber                 |
└-------------------------------------------------------------┘

2010s–Present

┌-------------------------------------------------------------┐
| 3. Cognitive / Intelligence Wave (Data Interpretation)      |
|    - Neural networks, ML, LLMs                              |
└-------------------------------------------------------------┘

Layers of the AI Stack

 

.---------------.                            .----------------------------------.
|  Application  |    ----------------------  |  User interface and experience.  |
'---------------'                            '----------------------------------'
.---------------------.                      .--------------------------------.
|  Cognitive / Model  | -------------------  |  inference / decision-making.  |
'---------------------'                      '--------------------------------'
.-----------------.                          .----------------------------------.
|  Data Pipeline  |  ----------------------  |  sorting, information retrieval  |
'-----------------'                          '----------------------------------'
.-----------------------.                    .---------------.
|  Network / Transport  | -----------------  |  Moving data  |
'-----------------------'                    '---------------'
.---------------------------.                .-------------------------.
|  Infrastructure/Compute   |  ------------  |  Raw physical hardware  |
'---------------------------'                '-------------------------'

Technology waves

Each wave created a layer that allows the next technological waves to operate

What is the relationship between the different layers

  • dynamic complementarity

 

Dynamic complementarity

  • complementarity
  • dynamic

Market Structure

Market structure and market capture

  • market structure is organisational and competitive characteristics of a market.
  • how competitive is a particular market segment

Krugman (1987)

  • Jumbo jet market

Takeaway

  • The greater the scale effects, the more fewer the firms in the market
  • Scale becomes a strategic tool
  • Increase the

Why does market capture matter?

  • Dynamic complementarity

New York Times article yesterday

Conger (2026)

History of Competition Policy

 

Post-war era

  • state held the power
  • Policies prevented market capture

1980s onwards

  • we have seen the power shit from the state to private players

Silicon Valley Consensus

  • 2000s have increased their market power

 

 

The economics of market capture will determine how the benefits of AI are distributed.

Conger, K. (2026). Google is building an a.i. Fence around the internet it once championed. New York Times.
Jensen, R. (2007). The digital provide: Information (technology), market performance, and welfare in the south indian fisheries sector. The Quarterly Journal of Economics, 122(3), 879–924.
Krugman, P. R. (1987). Is free trade passé? Journal of Economic Perspectives, 1(2), 131–144.

### Urbanism and Geopolitics

Humans in the Age of Artificial Intelligence: Automation, Market Structure and Skills

16th International Conference on Logistics, Informatics and Service Sciences (LISS2026), to be held 19–23 July 2026 at Wolfson College, University of Cambridge, United Kingdom.

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