The changing face of business - and the part artificial intelligence has to play

Technology is a key topic at the World Economic Forum's Annual Meeting 2017. Watch the session on Artificial Intelligence here.

Artificial Intelligence (AI) may be the single most disruptive technology the world has seen since the Industrial Revolution. Granted, there is a lot of hype out there on AI, along with doomsday headlines and scary movies. But the reality is that it will positively and materially change how we engage with the world around us. It’s going to improve not only how business is done, but the kind of work we do – and unleash new levels of creativity and ingenuity.

In fact, research from Accenture estimates that artificial intelligence could double annual economic growth rates of many developed countries by 2035, transforming work and fostering a new relationship between humans and machines. The report projects that AI technologies in business will boost labor productivity by up to 40 percent. Rather than undermining people, we believe AI will reinforce their role in driving business growth. As AI matures, it will potentially serve as a powerful antidote for the stagnant productivity and shortages in skilled labor of recent decades.

While it is early days, we are already seeing AI’s impact. Combined with cloud, sophisticated analytics and other technologies, it is starting to change how work is done by both people and computers. It’s also changing how organizations interact with consumers, sometimes in startling ways.

AI is flourishing now because of the rise of ubiquitous computing, low-cost cloud services, near unlimited inexpensive storage, new algorithms, and other related technology innovations. Cloud computing along with advances in Graphical Processing Units (GPU’s) has provided necessary computational power. AI algorithms and architectures have progressed rapidly, often enabled by open source software.

Artificial Intelligence is not just one technology, but rather a variety of different sorts of software that can be applied in numerous ways for different applications.

But equally important is a vast increase in the availability of data. AI does not think for itself. Its insights are possible because the software gets fed information, and the more information it gets, the more insight it can produce. Over the last decade, crowdsourced data in particular has proliferated on internet and social media. People in their daily lives upload massive quantities of images, videos, social media comments, and chat dialogues. All that creates labelled data that is available for machines to use in what’s called machine learning.

While many believe that AI will supplant humans, we think it will instead mostly enable people to do more exceptional work. Certainly, AI will cause displacement of jobs, but it may also significantly boost the productivity of labor. Innovative AI technologies will enable people to make more efficient use of their time and do what humans do best – create, imagine and innovate new things.

With technology overall and AI in particular, the key ingredient for success and creating value is taking a “people first” approach. But to make this transition means both companies and governments must acknowledge the challenges and change how they behave. They must be thoroughly prepared—intellectually, technologically, politically, ethically and socially.

Governments and businesses will need to take several steps, many of which are not easy:

-Prepare the next generation. Re-evaluate the type of knowledge and skills required for the future, and address the need for education and training. AI presents the opportunity to prepare an entirely new sort of skilled and trained workers that do not exist today. This training should be targeted to help those who are disproportionately affected by the coming changes in employment and incomes.

-Advocate for and develop a code of ethics for AI. Ethical debates, challenging as they will be, should be supplemented by tangible standards and best practices in the development and use of intelligent machines.

-Encourage AI-powered regulation. Update old laws and use AI itself to create adaptive, self-improving new ones to help close the gap between the pace of technological change and the pace of regulatory response. This will require government to think and act in new ways appropriate to the new landscape, and means more technologically-trained people must play an active role in government.

-Work to integrate human intelligence with machine intelligence.Businesses must begin reimagining business processes, and reconstructing work to take advantage of the respective strengths of people and machines.

The market demand and opportunity for AI is expanding rapidly, with analyst firm IDC predicting that the worldwide content analytics, discovery and cognitive systems software market will grow from $4.5 billion in 2014 to $9.2 billion in 2019. In fact, Accenture’s Technology Vision 2016—research that gathers input from more than 3,100 global business and IT executives—found that 70% of them are making significantly more investments in AI-related technologies than two years ago, with 55% planning to use machine learning and embedded artificial intelligence. Equity financings for AI companies have risen from $282 million in 2011 to $2.4 billion in 2015, or 746%, according to researchers at CB Insights. AI patents are being granted at a rate five times greater than 10 years ago. AI start-ups in the US alone have increased 20-fold in just 4 years.

A major Italian government agency offers a good example of how AI can dovetail with the work people do and enable them to be more effective. Employees there were spending the majority of their time attending to routine customer queries. The agency worked with Accenture to automate the process with AI. An intelligent Virtual Agent application now handles real-time voice calls and webchat interactions, using a combination of cognitive-semantic analysis and machine-learning algorithms. After just three months, the Virtual Agent application has already successfully served more than 70,000 users. Employees can now take on more demanding and rewarding tasks, which can positively impact their engagement.

AI is also positively impacting how governments operate. The Singapore government’s Safe City program uses the latest in video analytics and image recognition to assist in public safety. It increases security, delivers services more effectively and makes more efficient use of city resources.

The Accenture Institute for High Performance and Accenture Technology, in collaboration with Frontier Economics, modeled the impact of artificial intelligence on 12 developed economies that together generate more than 50 percent of the world’s economic output. The research compared the size of each country’s economy in 2035 under a baseline scenario, in which economic growth continues under current conditions, with an AI scenario, in which the impact of AI has been absorbed into the economy.

AI was found to yield the highest economic benefits for the United States, increasing annual growth from 2.6 percent to 4.6 percent by 2035, translating to an additional $8.3 trillion in gross value added (GVA). In the United Kingdom, AI could add an additional $814 billion to the economy in the same period. Japan has the potential to more than triple its annual rate of GVA growth by 2035, and Finland, Sweden, the Netherlands, Germany and Austria could see their growth rates double.

AI can empower people to create, imagine and innovate at entirely new levels to drive growth and productivity. Far from simply eliminating repetitive tasks, AI should put people at the center, augmenting the workforce by applying the capabilities of machines so people can focus on higher-value analysis, decision-making and innovation.