Data scientists use many different kinds of machine learning algorithms to discover patterns in big data that lead to actionable insights. At a high level, these different algorithms can be classified into two groups based on the way they “learn” about data to make predictions: supervised and unsupervised learning.

Supervised machine learning is the more commonly used between the two. It includes such algorithms as linear and logistic regression, multi-class classification, and support vector machines. Supervised learning is so named because the data scientist acts as a guide to teach the algorithm what conclusions it should come up with. It’s similar to the way a child might learn arithmetic from a teacher. Supervised learning requires that the algorithm’s possible outputs are already known and that the data used to train the algorithm is already labeled with correct answers. For example, a classification algorithm will learn to identify animals after being trained on a dataset of images that are properly labeled with the species of the animal and some identifying characteristics.

On the other hand, unsupervised machine learning is more closely aligned with what some call true artificial intelligence — the idea that a computer can learn to identify complex processes and patterns without a human to provide guidance along the way. Although unsupervised learning is prohibitively complex for some simpler enterprise use cases, it opens the doors to solving problems that humans normally would not tackle. Some examples of unsupervised machine learning algorithms include k-means clustering, principal and independent component analysis, and association rules.

While a supervised classification algorithm learns to ascribe inputted labels to images of animals, its unsupervised counterpart will look at inherent similarities between the images and separate them into groups accordingly, assigning its own new label to each group. In a practical example, this type of algorithm is useful for customer segmentation because it will return groups based on parameters that a human may not consider due to pre-existing biases about the company’s demographic.

Choosing to use either a supervised or unsupervised machine learning algorithm typically depends on factors related to the structure and volume of your data and the use case of the issue at hand. A well-rounded data science program will use both types of algorithms to build predictive data models that help stakeholders make decisions across a variety of business challenges.