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According to Grand View Research, the global artificial intelligence (AI) market was valued at U.S. $93.5 billion back in 2021. From 2022 to 2030, the market is expected to grow at a compound annual growth rate (CAGR) of 38.1%. This growth can largely be attributed to the “continuous research and innovation directed by the tech giants who are driving the adoption of advanced technologies in industry verticals, such as automotive, healthcare, retail, finance and manufacturing.”
In this blog, we explore the impact of AI on different business sectors, what the future of work looks like and how your business can embrace AI to enhance operations.
The impact of artificial intelligence on business
The impact of artificial intelligence on business is profound, as it is transforming the way companies operate and creating new opportunities for growth. With its ability to process vast amounts of data, it’s able to boost key performance metrics such as revenue, productivity, business growth, digital transformation and efficiency.
Artificial intelligence can help:
- Automate routine tasks, freeing up employees to focus on more creative and strategic work
- Make better decisions by providing accurate and timely data analysis
- Improve the customer experience by personalizing interactions and providing more tailored recommendations and support
- Reduce costs by optimizing processes and identifying areas for efficiency improvements
- Aid in fraud detection and prevention by identifying patterns and anomalies in data
- Improve the accuracy and speed of predictive maintenance in manufacturing and other industries, reducing downtime and saving money
- Gain a competitive edge by identifying trends and opportunities that might otherwise be missed
- Enhance cybersecurity measures by detecting and responding to threats more quickly and effectively
- Enable businesses to develop and deploy new products and services more quickly, accelerating innovation and growth.
From life-saving medical gear to self-driving vehicles, artificial intelligence has made its way into virtually every aspect of our lives. Whether it’s to improve workflows, reduce human error, provide deeper analytics, foster more informed decision making or allow for 24/7 capabilities, AI was invented to make our lives more efficient.
Why artificial intelligence? Well, considering the global big data market is estimated to grow to U.S. $103 billion by 2027, it’s safe to say that human-led analysis without the assistance of technology won’t be able to keep up. The increasing amount of data businesses are using to interpret areas of opportunity is growing at an alarming rate. Artificial intelligence can think faster than a human can due to its deep-learning algorithm maps. So the answer to “why AI?” is simply - because it makes perfect business sense, especially if you don’t want to be left behind in the digital economy.
Let’s look at some stats around AI in business. Yes, AI can process information faster than us, but has it been proven that it’s more efficient, more reliable and worth the investment?
A Harvard Business Review study found that companies that incorporated artificial intelligence into their sales and marketing saw an increase in lead generation by more than 50%, a reduction in their call times of 60% to 70% and overall cost reductions of up to 40% to 60%.
The success of artificial intelligence is evident but, like with any new investment, there are challenges:
A recurring theme is a lack of talent or knowledge around the subject of AI and how it could benefit one's business. A solution? Investing the time into getting your teams up to speed with your digital transformation plans.
- Explain why you are introducing artificial intelligence into the business
- Help them understand and see the vision and results that such implementations will return
- Consider hiring a consulting or training team that specialises in explaining the concept of automation and AI to those that are unfamiliar. Depending on the scale of your AI-implementation strategy, why not consider hiring subject matter experts who are solely there to act as an ‘information desk’ for all things AI.
Let’s take a step further and start to uncover the impact of artificial intelligence on various industries to understand the hold and universal application of this tech.
AI in the medical industry
38% of healthcare providers are using AI to help with patient diagnoses and according to research by Juniper Research, the success rate of bot interactions will increase to over 75% by the end of 2022. Key clinical health AI applications could see annual cost savings of up to U.S.$150 billion by 2026.
AI-powered computer systems have made their way into the healthcare sector. Popular applications of AI include diagnosing patients, improving communications between doctors, physicians and patients, transcribing medical documents, drug development and remote patient treatments.
AI in the mining industry
A study by Deloitte found that implementing artificial intelligence within a mining business allowed improved data processes making them 18 times faster than what was previously done in the field.
When considering applications of AI within the mining industry, we see a transition from a people-focused operation to a process-oriented one. This change can hope to improve overall OHS conditions for mineworkers, increase accuracy, decrease environmental footprints and provide faster decision-making abilities in an environment where any error could result in significant repercussions.
AI in the banking sector
The banking sector has introduced artificial intelligence to help with fraud detection, enhance customer experiences (CX) with online banking applications, personalization of customer services, more efficient customer credit analysis and improvements with compliance. According to IDC, the banking sector will be one of the top industries that invest in AI solutions by 2024. And rightly so, with artificial solutions expected to add more than U.S. $1 billion in value to the banking industry by 2035.
AI in the accounting industry
AI in accounting helps enhance the efficiency of internal accounting practices, purchase orders, invoicing, procurement, expense reports and accounts payable or receivable functions. Accounting is driven by data and in many instances, accounting-related tasks such as banking reconciliations are repetitive and time consuming. This makes it the perfect environment for artificial intelligence and machine learning. AI within the accounting market is expected to reach U.S. $161.8 million by 2028, with 80% of business leaders believe AI provides them with a competitive advantage.
Want to learn how artificial intelligence is transforming the future of accounting?
AI in the construction industry
From planning to building, construction and engineering professionals use artificial intelligence to add that extra element of accuracy and efficiency to their projects. It also helps with monitoring and keeping track of equipment, maintenance, construction errors and potential safety issues. A McKinsey report states that the implementation of AI within construction firms could lead to productivity increases of around 50% through real-time data analysis.
AI in the retail sector
AI and retail are a match made in heaven in an industry where customer experience and satisfaction is a key metric. AI can provide the ability for hyperpersonalisation of services and make efficient recommendations for service or product selections to increase customer loyalty and satisfaction. AI in the retail sector is anticipated to grow to U.S. $20.05 billion by 2026.
Artificial intelligence and the future of work
One of the most popular questions when it comes to artificial intelligence is “will I lose my job to a robot?”
The answer: this is dependent on the way in which your business decides to integrate artificial intelligence into its operations. Will complete business functions become a write-off as automation of processes comes in? Or, will the introduction of a AI chatbot provide the support of 10 to 20 customer service representatives, allowing the human employees more time to work on customer retention strategies? It is completely dependent on what AI-powered implementation tactic works for your business.
Research into this controversial topic are unbiased and aim to showcase both ends of the argument: a loss of work versus an increase in job opportunities. For example, cognitive technologies such as robots, AI, machine learning and automation will replace 16% of jobs but also create 9% of new jobs in the United States by 2025.
A McKinsey study analyzed over 2,000 work activities across 800 role occupations to accurately examine the technical feasibility of automation.
What these results tells us is that even when ‘machines take over’ tasks within any occupation, there are activities in which AI cannot be relied on to cover such as managing others, applying expertise and stakeholder interactions.
Explore further: The environmental impact of artificial intelligence
Artificial intelligence can help combat climate change but can also be a major contributor to the emissions issues our world is facing. The energy it takes to ‘train’ an AI program can be excessive. Take the training of a powerful language model which was estimated to have consumed enough energy during it’s training stages to leave a carbon footprint big enough to drive a car ‘from Earth to the moon and back.’
On the other hand, the long-term effects of implementing AI on the environment, could positively enable 93% of environmental-based targets such as the creation of low-carbon cities, IoT devices that modulate their consumption of electricity, smart grids that integrate renewable energy and the ability to combat marine pollution.
Embracing artificial intelligence to improve your business operations
Since 2019, the number of businesses adopting artificial intelligence has grown by 270%. By introducing AI and it’s quick learning capabilities, businesses can create super-powered data processing machines that can generate information, extrapolate large amounts of data and even take care of tasks that free up time and budget for organizations to focus on more face-to-face tasks.
Technologies such as artificial intelligence (AI) have already shown great potential to improve customer experience and engagement. More and more organizations are choosing to interact with their customers via voice interfaces and chatbots and as the technology improves, these applications will be able to conduct seamless customer service conversations at any time of the day or night.
For decades, companies have been forced to deal with industrial machines breaking down during the production process. Now imagine being able to perform predictive maintenance based on previously inaccessible insights into their operation. That is just one of the benefits of machine learning algorithms, which, along with artificial intelligence, are allowing companies to tap into volumes of information generated across their business units, partners and third-party sources.
Forrester Research believes virtual and augmented reality will be the norm in the future. For McKinsey, it will be a world in which digital channels become the primary - and perhaps only - customer engagement models and automated processes become a primary driver of productivity. Either way, any business not preparing for the digital change that is coming, is a business that will struggle to remain competitive.
Economic impacts of artificial intelligence
It’s evident that AI can help improve growth for many organisations through enabling productivity and efficiency improvements. It improves the decision-making process through the analysis of big data sets, can support the identification of new products and services and boost customer demand by generating new revenue streams.
However, the creation of ‘super firms’, industry-leading AI organizations, could spell economic monopolisation and be potentially detrimental. AI could also widen the gap between developing and developed countries by boosting the need for qualified, skilled workers well-versed in automation and machine-learning. The disruptive effects of AI may also influence wages, income distribution and economic inequality.
Digital disruption drives digital innovation
Times of disruption and change can be uncomfortable. Artificial intelligence is just one of the many digital disruptions taking the world by storm. Over the last few years, the need to innovate has become essential and digital disruption is helping businesses stay competitive in the ever-changing business environment.
How can your business accelerate purposeful innovation, like investing in AI? What are the current business trends and “new digital opportunities” you can implement today? And, why are agile methodologies more important than ever? This blog, ‘How digital disruption can drive business innovation’ will take you through how your business can effectively use digital disruption in today’s “noisy” world.