"Pareto's law (80: 20 law)" is evolving with the development of big data analysis machine learning artificial intelligence

An empirical rule that some elements are producing most of the overall numerical value in the economyPareto's lawIt is known to be established in various fields. As computer software evolves, Pareto's law has evolved and evolved.

AI Is Going to Change the 80/20 Rule
https://hbr.org/2017/02/ai-is-going-to-change-the-8020-rule

Pareto's law is a concept discovered by Mr. Wilfred Pareto who is also an Italian economist and engineer, and is sometimes called "the law of 80:20" based on actual examplesPower lawis. For example, the case where 80% of the total sales are generated by 20% of customers as a whole and 80% of sales are generated by 20% of the total is true, and the latter case is "Long tailAs a model, it is also known as the concept that appeared in the Web 2.0 era.

However, as Big Data analyzing large amounts of data, machine learning, and artificial intelligence technologies develop, attempts to evolve existing Pareto's Law have begun, Michael Schleez said. These are ideas that should also be called "Neo-Pareto's rule", and are expected to be utilized more and more precisely and efficiently in various fields including businesses by utilizing computing.

◆ Smart Pareto rule
With the advancement of machine learning as it becomes possible to handle large amounts of data, Pareto's law can quickly and efficiently apply the law. For example, in personnel evaluation at the workplace, you can calculate "Who is 20% employees who contribute 80% value to improve the user experience", 20% upgrade that can affect 80% of improvement Change) is to find out something, 80% of customers feel disgusted, but 20% feel pleasure, etc. In every situation, it can be said that the law of 80:20 is established It will be possible.


◆ Super Pareto rule
"80: 20 law" is one of Pareto's laws, but because of its wide application range, it is so common that it can be considered "the law of Pareto = = 80: 20". However, depending on the field, 80: 20 applies, and proportions such as what applies to 15: 85 are various. There is also a field where the Pareto rule holds at a ratio far removed from the law of 80:20, and it is known that, for example, in the smartphone game industry, users less than 1% occupy the majority of revenues.

Half of smartphone revenue turned out to be supported by only 0.19% of all users - GIGAZINE


Mr. Schlage thinks that finding the ratio at which the optimum Pareto law is established according to the field by analyzing the data will greatly contribute to the growth of the business and create new products and services I will. Certain industrial equipment manufacturers in Europe judged that less than 4% of products accounted for one-third of sales, contributing to half of revenue. However, taking into consideration additional services such as maintenance, it seems that 5% of products accounted for more than two-thirds of revenue. Not only the product itself, but also finer Pareto analysis centered on attributes and functions is effective.

For this reason, in order to utilize the Pareto law of the new era in business, the data science department also identifies trends with a view to broadening the scope of application of Pareto's Law and the possibility that the law may be established at an extreme ratio It is required to take into consideration.

◆ Complex Pareto rule
As the Pareto Law increases more precisely, rather than thinking of the establishment of Pareto's law alone, it is possible that a number of Pareto's laws established will link and a new Pareto's law will be established . Mr. Schlage thinks that it is also required to look for a complex Pareto law that enhances the overall corporate value, not a specific proposition alone.