Impact of AI Technology on the Economy and Business

Impact of AI Technology on the Economy and Business 1
Artificial intelligence concept with businessman

AI brought $700 billion to companies – Gartner

In April, 2018, Gartner analytical agency published the results of a study showing how much companies in the world have earned money through the use of artificial intelligence technologies.

Experts assessed the commercial value of AI systems in companies representing various industries. The sum is made up of additional revenue, volume of reduced expenses, as well as revenues received as a result of improving the quality of customer service through the introduction of such technologies.

Gartner’s forecast for total revenue of companies obtained through artificial intelligence.

Impact of AI Technology on the Economy and Business 2

So, in 2017, companies around the world received $ 692 billion just because they used artificial intelligence. In 2018, revenue will rise to $ 1.2 trillion, and by 2022, the benefit will be measured at almost $ 4 trillion, researchers predict.

Artificial intelligence promises to be the most breakthrough class of technology for 10 years due to advances in computing power, volume, diversity, and data growth rate, as well as the development of deep neural networks , says John-David Lovelock, vice president of research for Gartner. (John-David Lovelock). – One of the largest aggregated sources for products and services using AI for companies in the period from 2017 to 2022 will be niche solutions that allow you to very well solve a specific task.Executives will invest in such products from thousands of highly specialized suppliers offering specific AI applications.”

 According to the analyst, first, the main business income from the use of artificial intelligence will come from improving customer service, as companies already see the impact of such technologies on increasing and retaining customers. In addition, organizations are looking for ways to use AI to improve business process efficiency , to improve decision making and automate more tasks, added Lovelock.

Gartner: By 2020, AI will be a priority for IT costs for a third of companies

In July 2017, Gartner published its forecast regarding the use of artificial intelligence (AI) technology and machine learning, according to which by 2020 these technologies will be present in almost all new software products and services. Also, experts believe that by this time, AI will become part of the digital transformation strategy and will be a priority for investments for almost a third of companies.

At the same time, analysts say that despite all the fears that AI people have, connected in particular with the threat of losing jobs, it still quickly penetrates into all spheres of human activity. According to experts, machine learning technologies can and already significantly complement human capabilities.

“AI offers great opportunities, but instead of understanding its value, identifying needs, developing potential usage scenarios, most companies rushed to create and promote new products in order to capitalize on the wave of interest in it,” said Jim Gartner, vice president of research. Haar.

At the same time, as emphasized in Gartner, cloud and mobile technologies are still drivers of growth in IT costs, despite the fact that the focus is on technologies such as VR and AI.

Gartner analysts predict that the corporate software market will grow at a high rate relative to other segments of the IT industry. So, if in 2016, software sales increased by 5.3% (to $ 326 billion), then in 2017-2018. an increase of 7.6% and 8.6% is expected – to $ 351 and $ 381 billion, respectively. Researchers explain the growing software sales by continuing investments by companies in analytics , AI, big data tools and SaaS solutions.

Teradata: 80% of companies are already investing in AI, predicting a number of difficulties in the future

According to the results of a Teradata study published in early October 2017, the vast majority of enterprises (80%) invest in artificial intelligence (AI) technology , but every third manager believes that in order to maintain its competitiveness, the company will have to increase such investments over the next three years.

At the same time, according to the expectations of enterprises, serious obstacles may arise in the way of introducing AI technologies, which can be overcome by the introduction of the leading position of the Chief Specialist in AI Technologies responsible for optimizing and coordinating the activities on introducing AI technologies.

Companies increase investment in AI

According to the survey, companies are optimistic and expect that their investment in AI technologies will pay off.

The industries whose representatives predict the maximum effect of investment in AI technologies include IT, technology and telecommunications (59%), commercial and professional services (43%), as well as consumer services and financial services (32% ).

The top three among the activities in which revenue growth is projected as a result of investment in AI technologies includes: new product development / research and development (50%), customer service (46%), and also supply and production activities (42%). The results obtained are consistent with the data on the main areas of investment in AI technologies, including the quality of customer service (62%), the development of new products (59%) and the optimization of production (55%).

Despite the high rates of use of AI technologies and the expected effect of their use, there is a great potential for their further implementation:

  • 80% of respondents say that AI technologies are already used in their organization in one form or another, but 42% indicate that there are greater opportunities for their further implementation in all areas of activity.
  • 30% are sure that their organization is still not investing enough in AI technologies, and in order to maintain competitiveness in its industry, it will need to increase such investments over the next three years.
  • As of October 2017, the surveyed companies are investing in US technology an average of $ 6.47 million compared with $ 8.25 million in the Asia-Pacific region.

A number of factors may complicate the implementation of AI technologies.

The overwhelming majority of respondents point out a number of factors hindering the introduction of AI technologies and generating income from investments in them. The main obstacles are the lack of information technology infrastructure and the lack of qualified specialists. At the same time, business leaders think much less about the impact of AI technologies and automation on staff morale – only 20% consider this a limiting factor, and even fewer (19%) are concerned about the development of a feasibility study on the introduction of AI technologies.

  • According to 91% of respondents, the introduction of AI technologies may be limited by a number of factors, the main ones being the lack of information technology infrastructure (40%) and the lack of qualified specialists (34%). Further, there are such factors as lack of funds for implementation (30%), restrictions associated with established procedures, rules and rights (28%), as well as the impact on consumer expectations (23%). For comparison, only 19% cite as an obstacle the insufficiently developed feasibility study on the introduction of AI technologies, and only 20% think about the impact of AI technologies and automation on staff morale.

* Business expectations regarding revenue growth and cost reduction / efficiency improvements as a result of investments in AI technologies were divided approximately equally – 53% and 47%, respectively.

  • Only 28% of respondents believe that there are enough qualified specialists in their organization to acquire, create and implement AI technologies.

 What will the demand for AI in companies lead to?

So far, IT directors (47%) and technical specialists (43%) are involved in addressing issues related to the use of AI technologies and strategy development. However, in the future, according to 62% of respondents, AI will become so popular to develop a strategy for all types of activities that it will require the involvement of a chief specialist in AI technologies to coordinate and manage their implementation activities.

According to company forecasts, the income per dollar invested will be $ 1.99 over the next 5 years and $ 2.87 over the next 10 years.

The greatest effect is expected in the following sectors: IT, technology and telecommunications (59%), commercial and professional services (43%), consumer services (32%), financial services (32%), and manufacturing and manufacturing ( 31%).

 What does it mean?

 Companies as a whole predict that AI technologies will become an integral part of our life, and therefore in 5 years they plan to double their investments in them, and three times over 10 years. However, they understand that in order to maximize the effectiveness of these investments, they need to reconsider their ideas about how AI technologies can affect all aspects of their operations, and develop an appropriate flexible strategy for improving efficiency.

 About the study

The survey was conducted by Vanson Bourne technology market research company commissioned by Teradata Corporation. The survey was attended by representatives of 260 major organizations operating throughout the world.

PwC: AI will increase global GDP by $ 15.7 trillion

According to the PwC “ Artificial Intelligence : Do Not Miss the Benefit” study , in 2030 global GDP will grow by 14%, or 15.7 trillion US dollars , due to the active use of artificial intelligence. Based on a detailed analysis of the impact of technology using artificial intelligence (AI) on business, the authors of the report provide an overview of the economies that have the prerequisites to extract the maximum benefit from AI.

PwC experts estimate that more than half of the increase will be due to an increase in labor productivity in the period 2016–2030. The rest of the profit will be obtained by increasing consumer demand due to the improvement of products through AI. The greatest economic benefit from AI can be gained by China (GDP growth in 2030 is +26%) and North American countries (+14.5%), or US $ 10.7 trillion – almost 70% of world GDP growth.

      • Initially, in North America, productivity growth rates will exceed those in China , because in these countries the level of readiness for the introduction of AI is higher and the share of jobs that can be automated is higher.
      • However, 10 years later, after a slightly slower increase in the necessary technological and expert base, China will outpace the United States in the rate of increase in productivity through the introduction of AI.
      • The countries of Europe and the developed countries of Asia will also receive substantial economic benefits from the introduction of AI (9-12% of GDP in 2030).
      • In developing countries, there will be a more modest increase in GDP from the introduction of AI (less than 6%) due to the predicted significantly less intensive spread of technologies using AI (including countries in Latin America and Africa).

Salesforce: The introduction of AI will increase global business revenue by $ 1.1 trillion.

According to the results of a study conducted by IDC for Salesforce , by 2021, artificial intelligence (AI) will allow businesses to receive additional revenue in the amount of $ 1.1 trillion. This will be possible due to the introduction of AI algorithms in customer relationship management systems (CRM). Incomes of commercial structures will increase due to an increase in labor productivity and reduction of expenses on automation of production processes. Each of these factors will increase the business revenue by $ 121 and $ 265 billion, respectively.

According to IDC estimates, AI will directly affect the creation of more than 800 thousand jobs and another 2 million indirectly. Experts note that this figure compensates for the loss of vacancies that could arise from the introduction of AI. Next year is expected to be key to the adaptation of AI technologies – almost half (40%) of the organizations that participated in the study stated their readiness to implement them in the next two years. In particular, almost a quarter of their number will be adapted by machine learning technology , text analysis – 27%, voice recognition – 30%, advanced numerical analysis – 31%.

IDC believes that global spending on cognitive / AI systems, including hardware and software, as well as related services, will increase from $ 8 billion in 2016 to $ 46 billion in 2020. the gain from the introduction of AI in the period under review will be the United States ($ 596 billion). Following will be Japan (91 billion), Germany (62 billion), Great Britain (55 billion) and France (50 billion).

Written by Kiran Gunta

The author has an experience of more than 6 years of corporate experience in various technology platforms such as Big Data, AWS, Data Science, Artificial Intelligence, Machine Learning, Blockchain, Python, SQL, JAVA, Oracle, Digital Marketing etc. He is a technology nerd and loves contributing to various open platforms through blogging. He is currently in association with a leading professional training provider, Mindmajix Technologies INC. and strives to provide knowledge to aspirants and professionals through personal blogs, research, and innovative ideas. You can reach him at: Linkedin or Email.

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