Artificial intelligence (AI) is already a reality in today’s business environment. Companies and governments need to devise strategies to optimize its use, writes BSC Applied CEO Andreas Cambitsis.
It can no longer be disputed that AI will have a significant impact on business. The question is what companies are doing to integrate it into their operations. How much impact AI will have on a business really depends on how willing management is to embrace its possibilities.
Some of the hype about the impact of artificial intelligence (AI) on jobs, and certain industries, is misplaced. It misses the point about this technology and how it enables business performance at levels never before seen.
The fact is that AI is already indispensable to just about every firm doing business today. Consider internet search, route-finding apps, translation software, image recognition and the growth of on-demand services in mobility and travel. These AI capabilities are already integral to many firms’ business models and operational environments.
This also clearly demonstrates why implementing AI is not an optional possibility, but a necessity. Innovative technology can be applied to business to improve performance, provide more certainty and enhance the ability to make business decisions modelled and scaled against an environment that business leaders would typically not be able to predict.
When we consider developments such as “digital twinning” it becomes clear that AI has huge potential to increase productivity, lower the cost of goods and services and improve health and safety, amongst many other benefits. It also points to the need for business to actively and responsibly adopt AI in a way that harnesses the benefits to their business for the long term.
Government too, should make the right policy calls and investments to ensure optimal outcomes. Discussions need to urgently move to how we can drive a responsible transition to an AI economy in South Africa if we are to make the leap-frog needed to trigger much-needed economic growth. It is not just about economic development, AI can have real benefits in developing our society, creating jobs and imparting competitive, sustainable skills that we will need in the future.
So far, the evidence is that AI is creating more jobs than it is destroying. The Uber on-demand ride-hailing service, for example, is enabled by AI. As with many other markets, it has created a new industry in South Africa providing more than two million rides and creating job opportunities for about 12 000 active drivers1.
Another issue requiring deep consideration is that, if AI does displace productive activities in the economy, who owns the AI, and who is the main beneficiary of the value created?
As things stand, it is increasingly likely that it will be the GAFA companies (Google, Amazon, Facebook, Apple) and Microsoft. They are already leading the AI race, with huge R&D budgets, world-class skills, and both personal and enterprise data that is only growing under their custody.
It is not inconceivable for example, that Google at some point could offer a solution in the legal domain that could displace 20% of manual legal activity in every country, at a fraction of the cost. Not only does this pose a threat of job losses, but could also see local currency moving overseas, giving more economic and political power to external entities. Whilst the solutions to these issues are not obvious, they need to start being discussed at the right levels.
AI will continue to impact all industries at an ever-increasing rate, from financial services and telecoms to mining and manufacturing. It is likely to have a bigger impact on jobs that require more repetitive tasks first. The transportation industry is likely to be affected severely, as we have seen with Uber. The next big step is likely to be in autonomous cars and trucks.
To elaborate on the digital twinning example, this is a form of AI that allows better-informed decisions leading to optimising production cycles, maintenance and workforce productivity. The investment in this AI reduces cost and extends the life cycle of production assets. It also enables decision making that the C-Suite has never before been able to apply.
AI can provide confidence in decision making across various aspects of our economy and society. This area needs significant proactive policy intervention. A good example is the enablement of a policy landscape that promotes AI in the automotive sector. Consider this. On the one hand, the threat to thousands of jobs is massive. On the other, there are about 1.25 million road deaths a year, according to the World Health Organisation2. Autonomous cars can make road transport up to 10 times safer. The economic benefits of this simply cannot be overlooked.
The “economic forcing function” is so significant in this space, that it has attracted significant investment and adoption will be quick, as technology is perfected, and regulation evolves. One category of job roles that is immune for now is those that require interpersonal interaction – particularly healthcare functions such as nursing and psychology.
The impact of AI is also a function of management’s willingness to embrace its possibilities. It will take courage to fully embrace AI and unless it is fully embraced, results will be limited.
AI remains a specialised field, where expert guidance is useful – as it was, for instance, when
computerisation was first deployed in a business context. Firms often start off from a technology driven perspective without a clear link to the business problem or how it will add value. Decision makers must understand exactly how AI will add value to their business. They do not need to understand the intricacies, but they must understand what it can and cannot do and precisely how it will add value to their business.
AI is not a magic wand, but it can be a powerful weapon in any business arsenal. It is a game changer that’s already changing the game. It must be incorporated into policy and strategy planning immediately if we are to design the AI economy that suits our needs.
