Supervised vs. Unsupervised Learning: Which is Better for Your Business?

September 11, 2023
5 mins read
Last Updated December 26, 2023
Supervised vs Unsupervised Learning

Supervised vs. Unsupervised Learning: Which is Better for Your Business?

Assuming your familiarity with machine learning – where algorithms and data enable computers to learn and decide, let’s look at the two models that emerge while applying these algorithms to real-world issues: supervised and unsupervised learning.

The advent of deep neural networks has revolutionized supervised learning, yielding accurate models in medicine and autonomous driving. Meanwhile, unsupervised learning, propelled by Generative adversarial networks (GANs), has reshaped fashion and entertainment with synthetic data.

So, which is better? Should you choose one over the other or look for an alternate?

In this post, we’ll go through the difference between these fundamental approaches, highlighting their benefits and applications.

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What is supervised learning

Supervised machine learning involves training a computer system with labeled input data. The computer then predicts output for unlabeled data.

Supervised Learning

For example, in sentiment analysis, a model learns from labeled text samples gauging emotional polarity – positive and negative. This enables machines to detect sentiment through training with text-based emotion examples without human input.

What is unsupervised learning

Unsupervised learning is a machine learning model where AI learns patterns from unlabeled data without explicit guidance. It identifies inherent relationships, clusters, or patterns in data without predefined categories or target labels.

Unsupervised LearningFor example, in unsupervised learning, a model discovers the hidden patterns or similarities of the unlabeled fruits and classifies the new fruits that it has not seen before based on it.

Supervised vs. Unsupervised Learning

Points of Difference 

Supervised Learning

Unsupervised Learning

What it is

You train model using labeled input data alongside its corresponding paired labeled output data.

You train the model to uncover concealed patterns within data that lack labels.


Predict target labels or outcomes

Discover underlying patterns or structures in the data and apply those to new data for similar insights

Performance Evaluation

Can be evaluated using metrics like accuracy, precision, recall, etc.

Evaluation is more complex and subjective, and often relies on domain knowledge


Pin-point accuracy

Not much accurate

Data Analysis




Linear regression, decision tree, neural network, logistic regression, etc.

Dimensionality reduction, association, clustering, probability density, association rule learning, etc.

Use Case

Bioinformatics, predictive analytics,  object recognition, customer sentiment analysis, etc.

Organize computing clusters, astronomical data analysis, image and video analysis, social network analysis,etc.

Let’s understand each of these differentiating factors:

1. Learning approach

Supervised learning comprehends the training dataset by iteratively generating predictions and fine-tuning them for accuracy. This approach deals with labeled training data where the system is familiar with output data patterns.

On the other hand, unsupervised learning models automatically discern underlying data patterns without any labels to guide them. Operating with unlabeled data, this algorithm derives output data from the collection of perceptions.

2. Feedback loop

Supervised learning operates over an iterative learning process with a feedback loop. It directly incorporates feedback on predictions, iteratively refines them, and improves its responses. This loop assists in adjusting settings and reducing forecast mistakes.

Conversely, unsupervised learning operates without explicit reinforcement and depends primarily on the underlying structure of the data.

3. Complexity

Supervised learning offers a straightforward approach, often computed using tools such as R or Python.

On the other hand, unsupervised learning tackles large unlabeled datasets to find the data’s hidden patterns. Training here is more difficult because of the predetermined output.

Moreover, both approaches grapple with concerns like overfitting and accuracy, though in different ways. Overfitting, a common pitfall in supervised learning, emerges when a model becomes overly tailored to training data, causing it to perform poorly on unseen data.

In unsupervised learning, the absence of specific output reduces traditional overfitting. However, models can still capture noise or anomalies, leading to inaccurate patterns.


Supervised and unsupervised learning examples include different categories such as classification, regression, clustering, latent variable methods, and more.

Supervised learning examples

Regression vs Classification
  • Classification – Classification involves assigning new observations to specific categories based on training data. Here, an AI agent uses a given dataset to determine specific classes like “Yes” or “No,” “0” or “1,” or labels like “cat” or “dog.”
  • Regression – Regression investigates the relationship between one or more independent variables and a dependent variable. It has diverse applications in predictive models, including financial forecasting, marketing optimization, health predictions, analyzing market trends, etc.

Unsupervised learning examples

  • Clustering – Clustering groups unlabeled data by identifying patterns and similarities, revealing natural groupings. It uncovers trends, identifies outliers, and supports anomaly detection. The common methods in clustering are K-means Clustering and Gaussian Mixture Models (GMM).
  • Association – Association is another unsupervised learning technique employing various principles to uncover connections between variables within a dataset. An example is market basket analysis and recommendation systems, resembling suggestions such as “Customers Who Purchased This Product Also Bought.” A prominent association method is the Apriori Algorithm.
  • Dimensionality reduction – Dimensionality reduction is a method that trims the features in a dataset while keeping important information. This reduces the quantity of data inputs to a manageable level while maintaining data accuracy. Dimensionality reduction is frequently employed during data preprocessing, like when autoencoders eliminate visual noise to enhance image quality.

5. Goals

In the case of supervised learning, the main goal is cleared beforehand. Though, you need to clarify the goal for the unseen data.

On the contrary, in unsupervised learning, the aim is to understand patterns and trends within unlabeled data.

6. Drawbacks

Supervised learning models often demand significant time investment during the training phase, owing to the need for extensive labeled data for both input and output variables, which necessitates domain expertise.

Meanwhile, unsupervised learning approaches can yield results of varying accuracy, frequently requiring human intervention to validate the output variables and ensure their reliability.

7. Real-world use cases

Supervised learning has many uses and is one of the finest methods for obtaining accurate results. Here is a collection of well-known applications of supervised learning:

  • Bioinformatics – It involves preserving the biological data of individuals, encompassing elements such as fingerprints, iris patterns, ocular features, and swabs.Contemporary smart devices can retain fingerprints, prompting authentication via either fingerprint or facial recognition whenever access is required.
  • Object recognition – When you have a large dataset to teach your algorithm, you can use object recognition to identify a new instance. Raspberry Pi algorithms are an excellent example of object recognition.
  • Spam detection – Supervised learning algorithms are pretty helpful in determining whether or not the email is spam. It recognizes and delivers a specific email to the relevant categorized or spam categories based on distinct keywords and content.
  • Customer sentiment analysis – Understanding and analyzing customer comments, reviews, and interactions to discover their emotional tone, thoughts, and attitudes towards a product, service, or brand is what customer sentiment analysis is all about. This assists firms in gaining insight into customer happiness, identifying areas for development, and making educated decisions to improve the entire customer experience.

The unsupervised learning model provides a powerful means to analyze data, enabling businesses to uncover patterns within vast datasets. This approach has numerous real-time applications, such as:

  • Organize computing clusters – The geographical regions of servers are established by clustering web requests received from a specific region across the globe. Subsequently, each local server will only contain data commonly generated by users from its corresponding region.
  • Social network analysis – Social network analysis is done to prepare clusters of friends based on their connection frequency. This kind of analysis reveals the links between the users of similar social networking websites.
  • Astronomical data analysis – Unsupervised learning facilitates astronomical data analysis by enabling the clustering of stars based on their properties. Also, it helps in identifying anomalies in celestial objects and extracting meaningful features from astronomical images.
  • Image and video analysis – Performing image and video analysis manually is time-consuming, demanding significant human resources. However, unsupervised learning automatically detects objects in videos and images. This is beneficial in training specialized machine learning models utilized in self-driving cars, security cameras, and medical imaging.

When to use: Supervised vs. Unsupervised learning

You can use supervised learning when you:

  • Have a clear-cut problem and are aware of potential outcomes
  • Possess limited labeled training data but have a substantial amount of unlabeled data
  • Are dealing with problems that involve predicting a particular output variable, like in classification or regression tasks
  • Aim to cut down the cost of labeling data

Conversely, you can use unsupervised learning when you:

  • Lack labeled data or a specific task to accomplish, but wish to explore data and discover concealed patterns or clusters
  • Want to reduce the dimensionality of your data or conduct feature extraction
  • Have expertise in data interpretation and analysis
  • Need to uncover hidden patterns or structures within data

Can we use supervised and unsupervised learning together?

Yes, you can use both supervised learning and unsupervised learning jointly with semi supervised learning, which is a separate machine learning category in itself.

Semi supervised learning is beneficial when labeling a dataset is difficult. If you have a limited number of labeled training data but a large amount of unlabeled data, combining supervised and unsupervised learning methods can considerably enhance accuracy and efficiency.

ChatGPT is a timely example that incorporates both supervised and unsupervised learning techniques. If you combine human feedback to it, it becomes Reinforcement Learning with Human Feedback (RLHF), which is the key to ChatGPT’s breakthrough performance.

Parting words

In the world of AI and ML, the debate on supervised vs unsupervised learning has been ongoing. No algorithm or approach is superior. It all comes down to the use case.

For instance, if you’re building a conversational AI, the power lies in combining supervised learning and unsupervised learning with human feedback.

Hence, prior to deciding,

  • Assess your input data
  • Define your objectives
  • Scrutinize algorithm choices

Most importantly, choose the right development partner.

Hiren is VP of Technology at Simform with an extensive experience in helping enterprises and startups streamline their business performance through data-driven innovation.

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