Discussions at the recent World Economic Forum in Davos underscored the pivotal role of AI in shaping the future. Its heightened significance for governments, enterprises, and individuals is evident as policymakers acknowledge its expanding influence. Amid these deliberations, business leaders face the challenge of steering digital transformation initiatives, aiming to sustain competitiveness by leveraging advancing tools and technology to glean insights from the latest developments in AI.
Warnings About AI
The IMF warned about AI being potentially economically ruinous – exacerbating inequality and leading to job losses. Whilst it did acknowledge that AI could present many opportunities, it focused primarily on the risks. The IMF anticipates that 60% of jobs in ‘advanced economies’ will be impacted by the technological revolution and forecasted that 50% of these jobs will face adverse economic effects. This concern was echoed by the chair of the Basel Committee on Banking Regulation Supervision who argued for more political intervention on AI, positing that issues relating to AI, ‘if not properly managed could change the course of history not necessarily for the good’.
Seizing the Opportunity
There is undoubtedly the feeling that we are witnessing a revolution, a sea-change moment, in the world of technology which political and economic institutions are eager to manage well. Major institutions at Davos casting doubt on the character of AI have obscured the fact that AI, as a topic, is inherently polarizing and consistently divides opinions. In the business world, it is seen as a tool for optimization. It is synonymous with success.
This can be seen across a range of sectors, for example, societal and commercial. AI is set to significantly speed up company processes – saving time and resources. In this way it will make work easier, rather than replacing workers entirely. Research by McKinsey found that AI will cause significant changes, but in a positive way, with companies being able to unlock major profits that they would not have access to otherwise. Looking purely at generative AI, they forecast that tech companies will see their global industry revenue grow by 9% and that banking and pharmaceutical industries will see increases of up to 5%. This demonstrates that change does not necessarily signal negative outcomes.
Whilst the benefits to the workforce are significant, this is not the only area to be affected; AI could have genuinely transformative effects for the whole of society. At the National Academies meeting on ‘the present and future of AI in advancing scientific discovery’, discussion revealed it was already having significant impacts on research into neurodegenerative diseases. Elsewhere, in a collaboration project between Microsoft and PNNL, AI was used to rapidly process and filter information, optimizing processes, which can be painstakingly long and repetitive for humans.
Where and How are AI Tools Being Adopted by Business?
Despite the proven benefits, and wide accessibility of AI, there are significant disparities in its uptake by different countries. The IBM Global AI Adoption Index 2022 revealed that in Chinese and Indian companies 60% of IT professionals said AI was already in use; this was more than double the adoption in the US and UK which sat at 25% and 26% respectively. However, the US and UK appear to be leading on the adoption of generative AI – with 38% of American chief executives and over 40% of British chief executives using the technology, far outstripping their neighbors in continental Europe, according to the PwC’s 27th annual CEO Survey.
These inequalities are made even more stark when taking into account how uptake rates differ by sector, with automotive and financial industries steaming ahead, based on findings from IBM.
Businesses will find themselves grappling with different challenges at different points on their digital transformation journey. Research by McKinsey found that companies that get the most out of AI are more likely to follow strategies alongside other key practices, for example, having an AI roadmap, with key goals which are linked to wider company targets being key. These are complex processes that often stray outside the core competence of what a business does best, so many organizations seek to collaborate with specialist partners to ensure their time and budget is used most effectively.
Businesses Must Have Access to the Right Skills to Capitalize on the Potential of AI
Clearly, it is vital that businesses that want to be competitive invest not just in AI tools, but in the human talent they need to get the best from those tools. For many businesses, securing and retaining this talent is one of their biggest challenges.
With AI’s potential to revolutionize operations from cybersecurity to customer service – it’s a vital challenge to overcome. For many businesses, this element of the digital transformation will require upskilling existing talent to work effectively in the fast-moving world of AI. Elev8 regularly works with businesses with ambitious transformation goals to design bespoke skilling programs to fit their teams for the future.
While AI continues to make the news with extreme predictions of how it will affect society and economies worldwide in years to come, businesses must act today if they are to ensure they are not left behind the competition when it comes to activating the efficiencies and improvements AI can deliver, when adopted alongside appropriately skilled teams.