Algorithms are the backbone behind technology that have helped establish some of the world’s most famous companies. Software giants like Google, beverage giants Coca Cola and many other organizations utilize proprietary algorithms to improve their services and enhance customer experience. Algorithms are an inseparable part of the technology behind organization as they help improve security, product or service recommendations, and increase sales.

Knowing the benefits of algorithms is useful, but you might also be interested to know what makes them so advantageous. As such, you’re probably asking: “What is an algorithm?” Here’s the most common algorithm definition: an algorithm is a set of procedures and rules a computer follows to solve a problem.

In addition to the meaning of the word “algorithm,” this article will also cover the key types and characteristics of algorithms, as well as their applications.

Types of Algorithms and Design Techniques

One of the main reasons people rely on algorithms is that they offer a principled and structured means to represent a problem on a computer.

Recursive Algorithms

Recursive algorithms are critical for solving many problems. The core idea behind recursive algorithms is to use functions that call themselves on smaller chunks of the problem.

Divide and Conquer Algorithms

Divide and conquer algorithms are similar to recursive algorithms. They divide a large problem into smaller units. Algorithms solve each smaller component before combining them to tackle the original, large problem.

Greedy Algorithms

A greedy algorithm looks for solutions based on benefits. More specifically, it resolves problems in sections by determining how many benefits it can extract by analyzing a certain section. The more benefits it has, the more likely it is to solve a problem, hence the term greedy.

Dynamic Programming Algorithms

Dynamic programming algorithms follow a similar approach to recursive and divide and conquer algorithms. First, they break down a complex problem into smaller pieces. Next, it solves each smaller piece once and saves the solution for later use instead of computing it.

Backtracking Algorithms

After dividing a problem, an algorithm may have trouble moving forward to find a solution. If that’s the case, a backtracking algorithm can return to parts of the problem it has already solved until it determines a way forward that can overcome the setback.

Brute Force Algorithms

Brute force algorithms try every possible solution until they determine the best one. Brute force algorithms are simpler, but the solution they find might not be as good or elegant as those found by the other types of algorithms.

Algorithm Analysis and Optimization

Digital transformation remains one of the biggest challenges for businesses in 2023. Algorithms can facilitate the transition through careful analysis and optimization.

Time Complexity

The time complexity of an algorithm refers to how long you need to execute a certain algorithm. A number of factors determine time complexity, but the algorithm’s input length is the most important consideration.

Space Complexity

Before you can run an algorithm, you need to make sure your device has enough memory. The amount of memory required for executing an algorithm is known as space complexity.

Trade-Offs

Solving a problem with an algorithm in C or any other programming language is about making compromises. In other words, the system often makes trade-offs between the time and space available.

For example, an algorithm can use less space, but this extends the time it takes to solve a problem. Alternatively, it can take up a lot of space to address an issue faster.

Optimization Techniques

Algorithms generally work great out of the box, but they sometimes fail to deliver the desired results. In these cases, you can implement a slew of optimization techniques to make them more effective.

Memorization

You generally use memorization if you wish to elevate the efficacy of a recursive algorithm. The technique rewrites algorithms and stores them in arrays. The main reason memorization is so powerful is that it eliminates the need to calculate results multiple times.

Parallelization

As the name suggests, parallelization is the ability of algorithms to perform operations simultaneously. This accelerates task completion and is normally utilized when you have a lot of memory on your device.

Heuristics

Heuristic algorithms (a.k.a. heuristics) are algorithms used to speed up problem-solving. They generally target non-deterministic polynomial-time (NP) problems.

Approximation Algorithms

Another way to solve a problem if you’re short on time is to incorporate an approximation algorithm. Rather than provide a 100% optimal solution and risk taking longer, you use this algorithm to get approximate solutions. From there, you can calculate how far away they are from the optimal solution.

Pruning

Algorithms sometimes analyze unnecessary data, slowing down your task completion. A great way to expedite the process is to utilize pruning. This compression method removes unwanted information by shrinking algorithm decision trees.

Algorithm Applications and Challenges

Thanks to this introduction to algorithm, you’ll no longer wonder: “What is an algorithm, and what are the different types?” Now it’s time to go through the most significant applications and challenges of algorithms.

Sorting Algorithms

Sorting algorithms arrange elements in a series to help solve complex issues faster. There are different types of sorting, including linear, insertion, and bubble sorting. They’re generally used for exploring databases and virtual search spaces.

Searching Algorithms

An algorithm in C or other programming languages can be used as a searching algorithm. They allow you to identify a small item in a large group of related elements.

Graph Algorithms

Graph algorithms are just as practical, if not more practical, than other types. Graphs consist of nodes and edges, where each edge connects two nodes.

There are numerous real-life applications of graph algorithms. For instance, you might have wondered how engineers solve problems regarding wireless networks or city traffic. The answer lies in using graph algorithms.

The same goes for social media sites, such as Facebook. Algorithms on such platforms contain nodes, which represent key information, like names and genders and edges that represent the relationships or dependencies between them.

Cryptography Algorithms

When creating an account on some websites, the platform can generate a random password for you. It’s usually stronger than custom-made codes, thanks to cryptography algorithms. They can scramble digital text and turn it into an unreadable string. Many organizations use this method to protect their data and prevent unauthorized access.

Machine Learning Algorithms

Over 70% of enterprises prioritize machine learning applications. To implement their ideas, they rely on machine learning algorithms. They’re particularly useful for financial institutions because they can predict future trends.

Famous Algorithm Challenges

Many organizations struggle to adopt algorithms, be it an algorithm in data structure or computer science. The reason being, algorithms present several challenges:

  • Opacity – You can’t take a closer look at the inside of an algorithm. Only the end result is visible, which is why it’s difficult to understand an algorithm.
  • Heterogeneity – Most algorithms are heterogeneous, behaving differently from one another. This makes them even more complex.
  • Dependency – Each algorithm comes with the abovementioned time and space restrictions.

Algorithm Ethics, Fairness, and Social Impact

When discussing critical characteristics of algorithms, it’s important to highlight the main concerns surrounding this technology.

Bias in Algorithms

Algorithms aren’t intrinsically biased unless the developer injects their personal biases into the design. If so, getting impartial results from an algorithm is highly unlikely.

Transparency and Explainability

Knowing only the consequences of algorithms prevents us from explaining them in detail. A transparent algorithm enables a user to view and understand its different operations. In contrast, explainability of an algorithm relates to its ability to provide reasons for the decisions it makes.

Privacy and Security

Some algorithms require end users to share private information. If cyber criminals hack the system, they can easily steal the data.

Algorithm Accessibility and Inclusivity

Limited explainability hinders access to algorithms. Likewise, it’s hard to include different viewpoints and characteristics in an algorithm, especially if it is biased.

Algorithm Trust and Confidence

No algorithm is omnipotent. Claiming otherwise makes it untrustworthy – the best way to prevent this is for the algorithm to state its limitations.

Algorithm Social Impact

Algorithms impact almost every area of life including politics, economic and healthcare decisions, marketing, transportation, social media and Internet, and society and culture in general.

Algorithm Sustainability and Environmental Impact

Contrary to popular belief, algorithms aren’t very sustainable. The extraction of materials to make computers that power algorithms is a major polluter.

Future of Algorithms

Algorithms are already advanced, but what does the future hold for this technology? Here are a few potential applications and types of future algorithms:

  • Quantum Algorithms – Quantum algorithms are expected to run on quantum computers to achieve unprecedented speeds and efficiency.
  • Artificial Intelligence and Machine Learning – AI and machine learning algorithms can help a computer develop human-like cognitive qualities via learning from its environment and experiences.
  • Algorithmic Fairness and Ethics – Considering the aforementioned challenges of algorithms, developers are expected to improve the technology. It may become more ethical with fewer privacy violations and accessibility issues.

Smart, Ethical Implementation Is the Difference-Maker

Understanding algorithms is crucial if you want to implement them correctly and ethically. They’re powerful, but can also have unpleasant consequences if you’re not careful during the development stage. Responsible use is paramount because it can improve many areas, including healthcare, economics, social media, and communication.

If you wish to learn more about algorithms, accredited courses might be your best option. AI and machine learning-based modules cover some of the most widely-used algorithms to help expand your knowledge about this topic.

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Sage: The ethics of AI: how to ensure your firm is fair and transparent
OPIT - Open Institute of Technology
OPIT - Open Institute of Technology
Mar 7, 2025 3 min read

Source:


By Chris Torney

Artificial intelligence (AI) and machine learning have the potential to offer significant benefits and opportunities to businesses, from greater efficiency and productivity to transformational insights into customer behaviour and business performance. But it is vital that firms take into account a number of ethical considerations when incorporating this technology into their business operations. 

The adoption of AI is still in its infancy and, in many countries, there are few clear rules governing how companies should utilise the technology. However, experts say that firms of all sizes, from small and medium-sized businesses (SMBs) to international corporations, need to ensure their implementation of AI-based solutions is as fair and transparent as possible. Failure to do so can harm relationships with customers and employees, and risks causing serious reputational damage as well as loss of trust.

What are the main ethical considerations around AI?

According to Pierluigi Casale, professor in AI at the Open Institute of Technology, the adoption of AI brings serious ethical considerations that have the potential to affect employees, customers and suppliers. “Fairness, transparency, privacy, accountability, and workforce impact are at the core of these challenges,” Casale explains. “Bias remains one of AI’s biggest risks: models trained on historical data can reinforce discrimination, and this can influence hiring, lending and decision-making.”

Part of the problem, he adds, is that many AI systems operate as ‘black boxes’, which makes their decision-making process hard to understand or interpret. “Without clear explanations, customers may struggle to trust AI-driven services; for example, employees may feel unfairly assessed when AI is used for performance reviews.”

Casale points out that data privacy is another major concern. “AI relies on vast datasets, increasing the risk of breaches or misuse,” he says. “All companies operating in Europe must comply with regulations such as GDPR and the AI Act, ensuring responsible data handling to protect customers and employees.”

A third significant ethical consideration is the potential impact of AI and automation on current workforces. Businesses may need to think about their responsibilities in terms of employees who are displaced by technology, for example by introducing training programmes that will help them make the transition into new roles.

Olivia Gambelin, an AI ethicist and the founder of advisory network Ethical Intelligence, says the AI-related ethical considerations are likely to be specific to each business and the way it plans to use the technology. “It really does depend on the context,” she explains. “You’re not going to find a magical checklist of five things to consider on Google: you actually have to do the work, to understand what you are building.”

This means business leaders need to work out how their organisation’s use of AI is going to impact the people – the customers and employees – that come into contact with it, Gambelin says. “Being an AI-enabled company means nothing if your employees are unhappy and fearful of their jobs, and being an AI-enabled service provider means nothing if it’s not actually connecting with your customers.”

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Reuters: EFG Watch: DeepSeek poses deep questions about how AI will develop
OPIT - Open Institute of Technology
OPIT - Open Institute of Technology
Feb 10, 2025 4 min read

Source:

  • Reuters, Published on February 10th, 2025.

By Mike Scott

Summary

  • DeepSeek challenges assumptions about AI market and raises new ESG and investment risks
  • Efficiency gains significant – similar results being achieved with less computing power
  • Disruption fuels doubts over Big Tech’s long-term AI leadership and market valuations
  • China’s lean AI model also casts doubt on costly U.S.-backed Stargate project
  • Analysts see DeepSeek as a counter to U.S. tariffs, intensifying geopolitical tensions

February 10 – The launch by Chinese company DeepSeek, opens new tab of its R1 reasoning model last month caused chaos in U.S. markets. At the same time, it shone a spotlight on a host of new risks and challenged market assumptions about how AI will develop.

The shock has since been overshadowed by President Trump’s tariff wars, opens new tab, but DeepSeek is set to have lasting and significant implications, observers say. It is also a timely reminder of why companies and investors need to consider ESG risks, and other factors such as geopolitics, in their investment strategies.

“The DeepSeek saga is a fascinating inflection point in AI’s trajectory, raising ESG questions that extend beyond energy and market concentration,” Peter Huang, co-founder of Openware AI, said in an emailed response to questions.

DeepSeek put the cat among the pigeons by announcing that it had developed its model for around $6 million, a thousandth of the cost of some other AI models, while also using far fewer chips and much less energy.

Camden Woollven, group head of AI product marketing at IT governance and compliance group GRC International, said in an email that “smaller companies and developers who couldn’t compete before can now get in the game …. It’s like we’re seeing a democratisation of AI development. And the efficiency gains are significant as they’re achieving similar results with much less computing power, which has huge implications for both costs and environmental impact.”

The impact on AI stocks and companies associated with the sector was severe. Chipmaker Nvidia lost almost $600 billion in market capitalisation after the DeepSeek announcement on fears that demand for its chips would be lower, but there was also a 20-30% drop in some energy stocks, said Stephen Deadman, UK associate partner at consultancy Sia.

As Reuters reported, power producers were among the biggest winners in the S&P 500 last year, buoyed by expectations of ballooning demand from data centres to scale artificial intelligence technologies, yet they saw the biggest-ever one-day drops after the DeepSeek announcement.

One reason for the massive sell-off was the timing – no-one was expecting such a breakthrough, nor for it to come from China. But DeepSeek also upended the prevailing narrative of how AI would develop, and who the winners would be.

Tom Vazdar, professor of cybersecurity and AI at Open Institute of Technology (OPIT), pointed out in an email that it called into question the premise behind the Stargate Project,, opens new tab a $500 billion joint venture by OpenAI, SoftBank and Oracle to build AI infrastructure in the U.S., which was announced with great fanfare by Donald Trump just days before DeepSeek’s announcement.

“Stargate has been premised on the notion that breakthroughs in AI require massive compute and expensive, proprietary infrastructure,” Vazdar said in an email.

There are also dangers in markets being dominated by such a small group of tech companies. As Abbie Llewellyn-Waters, Investment manager at Jupiter Asset Management, pointed out in a research note, the “Magnificent Seven” tech stocks had accounted for nearly 60% of the index’s gains over the previous two years. The group of mega-caps comprised more than a third of the S&P 500’s total value in December 2024.

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